Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the chair]

PRIVATE BUSINESS

COUNTY OF SOUTH GLAMORGAN BILL [Lords](By Order)

Order for Consideration, as amended, read.

To be considered upon Thursday.

CROMARTY PETROLEUM ORDER CONFIRMATION BILL (By Order)

Order for further Consideration read.

To be further considered upon Thursday.

Oral Answers to Questions —

Mr. Speaker: Before we start Questions, may I ask for the co-operation of the House? If supplementary questions— and the answers—could be briefer, we could cover many more Questions.

Oral Answers to Questions — SOCIAL SERVICES

Occupational Pension Schemes (Management)

Mr. McCrindle: asked the Secretary of State for Social Services how many representations he received during the parliamentary recess on the White Paper on membership participation in occupational pension schemes.

The Minister for Social Security (Mr. Stanley Orme): I have received some 150 representations, of which 32 have come from the members of one pension scheme.

Mr. McCrindle: Has the Minister been following the expressions of public disquiet which have been revealed in the columns of the Press during the summer

over the proposal that 50 per cent, of the representation on occupational pension schemes should go to the trade unions? Will the right hon. Gentleman reconsider this proposal, which is opposed by, among others, trade unionists, since investment decisions on occupational pension schemes should be taken purely with thought for the benefit of the pensioners and not with thought to alleviating temporary unemployment?

Mr. Orme: The Government reaffirm their basic support for the proposals within the White Paper. During the summer and the autumn I have had consultations with employers and trade unionists about pension schemes. I have found a ready acceptance of many of the main points, and many pension schemes are already bringing themselves into line with some of the proposals in the White Paper.

Mr. Paul Dean: Does the Minister accept that many people who are working for the success of the pensions legislation are strongly opposed to giving trade unionists the monopoly in employee participation? Will he give an assurance that legislation will provide flexibility for the participation arrangements so that occupational pension scheme members can decide for themselves who shall represent them?

Mr. Orme: I have had representations along those lines which I have discussed with pension interests on both sides of industry, the CBI and TUC. Following those consultations, I see no reason why the Government should change their main proposals, because there is increasing acceptance of the general outline given in the White Paper.

Mr. Patrick Jenkin: Let me see whether I have it right. Is it the fact that the Minister has conceded that if no trade unionists are members of the scheme the trade union will not be involved, but that if only one out of perhaps many hundreds or thousands of members of a scheme is a trade unionist that man's trade union will have the right to appoint the entire representation of the members?

Mr. Orme: There is misunderstanding about this. I should explain to the right hon. Gentleman that if there are no trade unionists the White Paper provision does not apply. If there is one trade unionist


who is not accepted by the company as being a member of a recognised independent trade union, the White Paper and the Bill will not apply.

Analgesics (Sale)

Mrs. Chalker: asked the Secretary of State for Social Services if he will make a statement on the future sales of analgesics.

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): The Medicines Commission has advised that there will be no need to prohibit the sale by self-service methods of preparations containing analgesics when Part III of the Medicines Act 1968 is implemented, provided that the preparations are in child-resistant containers or strip-packaging and are in packs containing not more than 25 tablets. We are now considering this advice.

Mrs. Chalker: Will the Minister accept that analgesics sold through self-service outlets should be sold only at points of supervision, so that children are not able to purchase them in any quantity in a granny-proof rather than a child-proof container?

Mr. Moyle: That view has been put to me by the Proprietary Association of Great Britain. It is one of the views I am considering.

Mr. McNamara: Is my hon. Friend aware that people employed in the industry—not least the workers who are members of my union—are pleased with the decision he has made? Industry and the unions would be less averse to the selling of these products if there were no possibility of their falling into the wrong hands or being used for suicide. Will my hon. Friend ensure that the regulations cover all the objections that have been made to self-service sales of analgesics?

Mr. Moyle: I thank my hon. Friend for what he has said. The House will now realise why I am considering the advice carefully.

Mr. Thompson: Will the Minister bear in mind the remote areas, where people often buy the simpler analgesics from the grocer or the post office? If analgesics have to be sold in small quan-

tities, extra cost will be incurred by consumers because of the smaller quantity involved, in addition to the extra cost which people who live in remote areas have to bear anyway.

Mr. Moyle: The interest of people who live in rural areas is a point which I shall bear in mind.

Mr. Christopher Price: Is my hon. Friend aware that there is very strong feeling on this side of the House about the pressure exerted by drug companies to allow sales in supermarkets? Is he aware that many of my hon. Friends do not think that drugs should be treated like sweets and believe that they should be sold over the counter properly?

Mr. Moyle: That point of view has been put to me already by the Pharmaceutical Society of Great Britain. It wishes to ensure that proper public education takes place about the manner in which medicines are handled. I shall be taking that into account as well.

National Health Service (Resources Allocation)

Mr. Boscawen: asked the Secretary of State for Social Services when he expects to make an announcement on the allocation of NHS resources.

The Secretary of State for Social Services (Mr. David Ennals): I am aiming to give regional health authorities their allocations for 1977–78 at around the new year after considering the views of the authorities and other interested bodies on the recent report of the Resource Allocation Working Party.

Mr. Boscawen: Does the right hon. Gentleman agree that in the allocation of existing resources urgent attention should be paid to the over-lengthy waiting lists for non-acute surgery in any area? Has he read the latest report of the West Somerset Community Health Council, which states that if any area had a worse waiting list situation
it was a bleak outlook for people in this country"?
What is the right hon. Gentleman going to do about it?

Mr. Ennals: The problem of waiting lists is one that concerns me very much. It concerned my predecessor and every Minister responsible over the past 25


years. It is a serious problem. There have always been waiting lists which are too long. My predecessor, the right hon. Member for Blackburn (Mrs. Castle), introduced additional funds to assist where funds were the answer in alleviating the problem. In some cases waiting lists have become somewhat longer in the past few months, especially where industrial action was taken by consultants and, in some cases, by junior hospital doctors. I hope that we shall be improving the situation. It is an issue that I am examining carefully.

Mr. Spriggs: Will my right hon. Friend investigate the dangerously low level of nursing allocation in the parliamentary constituency of St. Helens before he decides upon the allocation of resources, in view of the report I have received in the past few days in which members of the trade unions and the area health authority report on the dangerously low level of nursing allocation?

Mr. Ennals: The report of the Resource Allocation Working Party showed that the North-West, Trent, the Northern Region, Yorkshire and Wessex were among the regions which needed to have a higher share of national resources than they had had hitherto. The report showed that the four Thames regions and Oxford already had more than their fair share of revenue resources. St. Helens is affected by that situation. I shall have to take a decision at the end of the year on whether to accept in full the recommendations that are brought forward. In many areas there are some uncertainties for nurses. Up to now they have always assumed that they would be able to take up appointments in the hospital in which they had been trained, but that is not now possible because the wastage rate of nurses is much less. In some cases, nurses have to be prepared to be a little more mobile than hitherto.

Mrs. Knight: Will the right hon. Gentleman confirm that retiring consultants such as dermatologists are not being replaced, that sufficient nurses are not being employed although they are available, and that vital equipment is not being purchased? Is he not presiding over the slow death of the National Health Service? Where does he plan to find other sources of revenue apart from the Exchequer?

Mr. Ennals: Since the Government came to power there has been substantial expenditure on the NHS. It has increased from less than 4 per cent, of our gross domestic product to nearly 6 per cent, in only two years. Even now, in a period of considerable economic stress, there is still an element of growth within the service.
I cannot confirm the hon. Lady's point about consultants. As for nurses, I can assure her that, whatever she may feel, there is a steady increase even now in the number of nurses employed by the NHS. Of course, there will never be enough money to meet all the demands for equipment. We shall never be able to meet what everyone wants in terms of new equipment. The hon. Lady will always be able to bring me examples of where it has not been possible to make an immediate purchase.

Health Education Council

Mr. Sims: asked the Secretary of State for Social Services whether he will increase the grant for health prevention work to the Health Education Council.

Mr. Ennals: As I stated in my reply to my hon. Friend the Member for Brent, South (Mr. Pavitt) on 15th October, I propose to allocate an extra £1 million to the Health Education Council for its budget for 1977–78. In addition, I shall be making available to the Health Education Council £200,000 a year specifically for contraception health education including publicity for the NHS family planning service.

Mr. Sims: Is the right hon. Gentleman aware that his announcement has been widely welcomed? Does he agree that a relatively modest increase in expenditure on health education can effect substantial economies in the treatment of illness and disease? That is particularly so for example, in dental health, bearing in mind the estimate that only half the population has a toothbrush.

Mr. Ennals: I agree with what the hon. Gentleman has said. That is one reason for my ministerial colleagues and myself putting a great deal of stress and emphasis on the importance of prevention and health. The launching of the publication "Prevention and Health: Everybody's Business" is really the beginning


of a new emphasis on preventive medicine. That is why we are greatly expanding the funds available—in fact, almost doubling them—to the Health Education Council.

Mr. Pavitt: Does my right hon. Friend recall that the Chief Medical Officer once said that the most important thing to do for preventive medicine was to do something about smoking and chest diseases? Will he take further action to make far more inroads into the £80 million being spent by the tobacco industry to persuade people to smoke? Even the amount now being given is inadequate unless the action supplements the work of the Health Education Council.

Mr. Ennals: I agree that an important contribution to the health of the nation could be made if people stopped smoking, or greatly reduced their smoking, and if young people and women did not start smoking. There has been a serious growth in the number of young people and women who have taken up smoking, to the detriment of their health as well as their economic situation.

Mr. Jessel: My hon. Friend the Member for Chislehurst (Mr. Sims) referred to dental health. Will the Health Education Council be asked to do more to promote fluoridation, which reduces dental decay in children by more than half, with absolute safety and at extremely low cost?

Mr. Ennals: I absolutely agree. Not only have I made a statement in support of fluoridation, but I have made additional funds available because I think it is a matter of great importance, especially following upon the point made by the hon. Member for Chislehurst.

Poverty

Mrs. Bain: asked the Secretary of State for Social Services what is the most recent estimate of the numbers in the United Kingdom living below the poverty line, as denned by his Department.

Mr. Orme: Poverty is a relative matter, and the Government do not accept that a simple poverty line can be drawn. In the past, information has been drawn from the annual Family Expenditure Survey as a convenient way of estimating the number of families with incomes below supplementary benefit level. The

1975 survey information suggests that 1,170,000 families comprising some 2,070,000 people have such an income.

Mrs. Bain: Bearing in mind that already dreadful figure, will the right hon. Gentleman indicate whether he has made any estimate of the likely result this winter of the cut-backs in manpower services within DHSS offices, which are even now having great difficulties meeting the demands put upon them at this time of high unemployment and rising prices? Does the right hon. Gentleman agree that this is the last area in which such services should be cut back?

Mr. Orme: I am aware of the difficulties that now exist in Scotland. It is not the Government's intention to create redundancies. There is a forward forecast, and talks are going on with the staff trade unions which, I hope, will bring this matter to a reasonable conclusion.

Mr. Cyril Smith: How many of the people to whom the right hon. Gentleman referred in his answer are in full-time employment and paying income tax on the level of earnings they are receiving in that employment?

Mr. Orme: I cannot give that information without notice. There is a great problem in regard to what is normally called the poverty trap. We would like to simplify the situation and take many people out of that trap, but that consideration involves many other aspects of Government policy, including taxation and public expenditure matters.

Mr. Gwilym Roberts: Does my right hon. Friend agree that simple steps such as the removal of food subsidies will considerably increase the number of people who fall below the poverty line? Therefore, will he use his undoubted weight in the Cabinet to put pressure on the Treasury in respect of measures of this type?

Mr. Orme: I assure my hon. Friend that my ministerial colleagues and I are fully aware of that argument. He will appreciate that the upratings next month are the highest level ever reached in recent times.

Mr. Kenneth Clarke: Does not the Minister realise that the problem of the poverty trap is becoming worse under the


Labour Government? This year, for the first time, anybody who goes out to work, whether married or single, and who earns less than the amount of long-term supplementary benefit could still find himself paying income tax on those earnings, even though he might be below the official poverty line. Will he accept that he is presiding over the steady growth in the number of people who find that it does not pay to work? Will he examine the tax credit approach as an answer to the problem?

Mr. Orme: I notice that recently even within the Conservative Party those proposals were criticised because they would have helped people who do not need help in such a situation. I am well aware of the problem of the poverty trap. We are examining the situation, and certainly my right hon. Friend the Chancellor of the Exchequer is well aware of these issues. We are as concerned as anybody about the situation, and we should like to take people out of the poverty trap as soon as possible.

Mr. Alexander W. Lyon: If 4 per cent, of our population are totally dependent on public expenditure for their standard of living, is it not criminal for there to be calls for further public expenditure cuts which would hit their standard of living as well as the standards of all the others who are partially dependent on the increased ratio in the top level of public expenditure which forms the most important part of their standard of living?

Mr. Orme: I take note of my hon. Friend's remarks. He made a powerful speech on this matter at a meeting which he and I attended recently. The House should take account of the increase in benefits which are being made, despite the economic situation, and which are being maintained.

Mr. Hall-Davis: In view of the statement by the Minister of State before the recess that in his view male wage and salary earners were not ready to accept the merits of child benefits, will he undertake to campaign in the next few months to publish details of those benefits? It seems certain that pay policy will be continued if the present Government remain in office and that there may

be another excuse for not introducing those benefits.

Mr. Orme: I thank the hon. Gentleman for drawing attention to the fact that there are many benefits to which people are entitled but which they do not claim. That group of people embraces one-parent families and those who are entitled to supplementary benefit. I am concerned to see that no genuine people are deterred from claiming their justifiable benefits.

Clinical Expenditure

Mr. Cronin: asked the Secretary of State for Social Services if he will give estimates of the amounts of expenditure for which the average general practitioner and the average consultant with his team are responsible, respectively, in making clinical decisions in the course of a year in the National Health Service.

Mr. Ennals: Detailed estimates cannot be made but, if the cost of the pharmaceutical and of the general medical services were broadly attributed to clinical decisions by general practitioners and the running costs of the hospital service to consultant teams' decisions, estimated averages for England in 1976–77 would be £36,000 and £290,000.

Mr. Cronin: Is it not the case that, for the sake of the principle of clinical freedom, there is hardly any effective control of this expenditure? Bearing in mind the intense pressures to which doctors are subjected by the pharmaceutical industry, would it not be possible for the Government, in consultation with the profession, to achieve some useful economies in this direction without prejudicing in any way the interests of patients?

Mr. Ennals: There is a major problem of escalating costs in the pharmaceutical industry. There are two aspects of the matter. One aspect concerns the cost of the pharmaceutical industry to the National Health Service, and I have been able to take action to limit the extent to which expenses can be set against costs charged. I am reducing the figure of spending from 14 to 10 per cent., and that will represent a saving. The other aspect relates to prescribing by general practitioners and hospitals. These are matters which can be dealt with only in consultation with the medical profession, but since this is


a part of the NHS over which there is no control whatever it should properly be discussed with the profession.

Mr. Speaker: Order. May I appeal to right hon. and hon. Members to ask shorter supplementary questions and to give shorter answers?

Dr. M. S. Miller: Does my right hon. Friend appreciate that those figures will be of great interest to general practitioners? Since the family doctor service is a sector of the National Health Service which attracts only 8 per cent, of the total cost of the service, and is the point at which most people have contact with the service, does not my right hon. Friend agree that if more money was spent on that aspect of the service it would be well spent and also cost effective?

Mr. Ennals: I shall be very brief, Mr. Speaker. This is the area with the greatest growth rate of expenditure in the National Health Service, and intentionally so. Primary care is an extremely important matter. There is a substantial growth rate in the amount of funds available for primary care as well as in the number of nurses working in the community.

Mrs. Chalker: Will the Minister publish a list of medical journals which will be threatened if he does not give more consideration to the speech which he delivered on 24th September?

Mr. Ennals: Nobody will be threatened.

Disabled Persons (Mobility)

Mr. Frank Allaun: asked the Secretary of State for Social Services what representations he has received regarding the phased withdrawal of vehicles for the disabled.

Mr. Luce: asked the Secretary of State for Social Services what representations he has received in the last two months from disabled people following his statement about the mobility allowance.

Mr. Hooley: asked the Secretary of State for Social Services how many representations he has received concerning the proposal to phase out the invalid tricycle.

The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): I refer the hon. Members to my reply to my hon. Friend the Member for Birmingham. Perry Barr (Mr. Rooker) on 11th October. I have also had meetings with representatives of several disabled peoples' organisations to hear their views. Our consideration of mobility policy is, of course, still on-going, and I am keeping very much in mind all the views expressed to me.

Mr. Allaun: I appreciate the great reforms introduced by my hon. Friend to help disabled people, but will he now assure thousands of anxious people by undertaking that he will not phase out the three-wheeled car, not even after five years, until drivers have been provided with an alternative or suitable vehicle and that he will avoid bringing to an end their social and working lives?

Mr. Morris: I am grateful to my hon. Friend for his comments. Since many disabled people have been caused unnecessary concern, I must state categorically that there is no question of any sudden withdrawal of tricycles for at least five years. We expect to carry on maintaining them, and it is our policy to replace worn-out tricycles. My right hon. Friend the Secretary of State assured the House in a statement on 23rd July that we were examining the continuing need of drivers for specialised vehicles. We shall see what vehicles are available in markets at home and abroad. Our aim will be to ensure that nobody who has a tricycle will be immobilised by the decision to phase out.

Mr. Luce: Will the Minister settle the principle of cash allowances? Does he not accept that those who at present have invalid tricycles will suffer a severe disadvantage when the mobility allowance is introduced since it will not cover the cost of purchasing and running a car? What progress is he making in the discussions with the Central Council for the Disabled on the question of mobility allowance?

Mr. Morris: As my right hon. Friend the Chancellor of the Exchequer has emphasised, we are seeking an increase, not only in terms of amount, but in terms of the value of the mobility allowance. The Central Council for the Disabled is studying what can be done to help disabled people to by cars on advantageous


terms. I have no doubt that they will be pleased to contact the hon. Gentleman, who takes a close interest in these matters.

Mr. Hooley: What guarantee is there that any manufacturer in the United Kingdom will continue to produce a suitable vehicle for the disabled if the Government's purchasing system ceases? Will it be sufficient that there is an optional market and not a Government guarantee of purchase?

Mr. Morris: This question underlines the considerable difficulties we have had. We do not know how many disabled drivers will opt for cash in place of hardware. I cannot go any further than the reply I have just given to my hon. Friend the Member for Salford, East (Mr. Allaun). We are aiming at giving disabled people more freedom of choice than they have at present. It is our resolve to extend the mobility of the disabled person, not to restrict it.

Mr. Patrick Jenkin: Does the Minister realise that the announcement made by his right hon. Friend led tens of thousands of disabled people to believe that their mobility would be restricted? Is it not now clear that a policy of equal misery for all is not at all satisfactory? [Interruption.] Will the Minister consider proposals to give the highest priority to those for whom help with mobility makes all the difference between dependence and independence?

Mr. Morris: It is my right hon. Friend's intention to have individual contact with every tricycle driver. On 23rd July, when my right hon. Friend made his statement, the right hon. Gentleman asked him whether he realised that Conservatives believed that in the great majority of cases cash rather than hardware should be the form of aid given to the disabled in terms of mobility considerations. His hon. Friends the Members for Wells (Mr. Boscawen) and for Wycombe (Sir J. Hall), among others, welcomed the statement. This Government are more than trebling expenditure on mobility for the disabled, and I appeal to the right hon. Gentleman and his hon. Friends to look at what they said on 23rd July and to try to make it clear to disabled people that we are seeking to extend their mobility.

Mr. Ashley: Many people will welcome the fact that, despite protestations from Conservatives, the Government have increased expenditure threefold on mobility for the disabled at a time of economic crisis. We also welcome the fact that my hon. Friend is looking at an alternative vehicle, because a vehicle is vital. Is my hon. Friend aware that the mobility allowance is not being given with the humanity with which it should be given? This is instanced by the case of a thalidomide boy with legs only a few inches long who has been denied a mobility allowance. Will my hon. Friend ensure that the mobility allowance is administered compassionately?

Mr. Morris: I shall be pleased to look into the case to which my hon. Friend has referred. I am grateful to him for emphasising that we are increasing considerably expenditure on mobility for the disabled. I wonder whether hon. Members realise that asking for an increase in expenditure for the disabled in July, as I did, was like asking to go for a holiday on the Normandy beaches in June 1944.

Prescription Pricing Authority

Mr. Ridley: asked the Secretary of State for Social Services what was the cost of the Prescription Pricing Authority in 1975–76; and what is the estimate for the current year.

Mr. Moyle: Nearly £4·4 million and about £5·5 million respectively.

Mr. Ridley: In view of the escalating costs, will the Minister try a little experiment and ask the private sector for a tender for doing this work? It is likely that he could save about half the cost of it if he got it done efficiently by the private sector.

Mr. Moyle: I am confident that the job is being done efficiently. The increased costs are due to £860,000 which took account of negotiated staff salaries and a further £240,000 to bring the staff up to the level it was at under the predecessor, the Joint Pricing Committee. The increase has had to take care of the steady secular trend in the rise of prescriptions in this country which is common to all advanced industrial countries.

Mr. Pavitt: Will my hon. Friend look at the increasing costs of the pricing of prescriptions and realise that nearly 55 per cent, of them are free? A great deal of machinery is used for collecting prescription charges, and therefore, this is more expensive than is necessary. Will my hon. Friend consider phasing out the present prescription charges when the economic situation allows?

Mr. Moyle: I will look into that suggestion, but the Prescription Pricing Authority does not concern itself with the collection of prescription charges.

Sir George Young: In view of the enormous financial problems facing the National Health Service at the present time, may I ask whether it is still the Government's policy to add to these by phasing out income from prescription charges?

Mr. Moyle: Yes.

Fraudulent Claims

Mrs. Knight: asked the Secretary of State for Social Services how many cases of social security fraud were investigated in 1971 and in 1975, respectively.

Mr. Orme: No record is kept of the number of investigations of suspected fraud, but the number of cases of fraud discovered was about 39,000 in 1971 and about 46,000 in 1975.

Mrs. Knight: Is the Minister aware that thousands of people at present receiving unemployment benefit are actually working? Is he aware of a recent case in which a builder applied to the local employment exchange for plasterers and was given 10 names, eight of whom already worked for him? Will the Minister make unemployment benefit conditional on claimaints regularly signing a form, on receipt of benefit, to the effect that they have not received any income in the period in question? Would not this act as a deterrent to fraudulent claims?

Mr. Orme: Blanket assertions like these do a great deal of harm. [HON. MEMBERS: "Hear, hear."] The hon. Lady does not talk about the millions of people who justifiably claim benefits and who are entitled to them. In cases where people are found to be defrauding the

system, action is taken, and the proof is there for all to see. We pay £10 billion a year in benefits to people. Last year we know that £2·6 million of these claims was fraudulent by the cases we took through the courts. I would like to see the hon. Lady and her hon. Friends take action on tax evasion on the same level as they do on social security frauds.

Mr. Ward: Can my hon. Friend say how many cases were brought to his notice from the hon. Member for Aberdeen, South (Mr. Sproat) to support his allegation that social security frauds cost the country £500 million a year?

Mr. Orme: The hon. Member for Aberdeen, South has been sending me quite a lot of letters and I am having them analysed. They do not all deal with fraud, and many of them have to be investigated. No one is more opposed to fraud and abuse than my right hon. Friend and myself. There are many people who on the surface appear to be defrauding the system, but on closer examination it is found that the facts are entirely different.

Mr. Sproat: Will the Minister accept that I am grateful to him for making clear that he has received many hundreds of cases from me? Does he agree that legal abuse is just as bad as illegal fraud, and will he take steps to introduce residential qualification for benefit in order to end the situation in which families come here from overseas and, without having done one day's work or having paid one day's contribution, can claim benefits in the same way and, in fact, get more in taxable benefits than people who have lived and worked here all their lives?

Mr. Orme: That is just another blanket assertion. The hon. Gentleman would do well to remember that many people are entitled to benefit here under our EEC obligations and through reciprocal arrangements with other countries. Where cases of fraud are brought forward, they are dealt with. However, in spite of the number of letters that the hon. Gentleman has sent me, he has failed to come up with any proposal which would improve the system.

Mr. Madden: Will my right hon. Friend compare the latest available figures


for the cost of social security fraud with the £300 million-plus of tax unrecovered last year? Will he also confirm that Labour Members will not tolerate generalised and unspecific attacks on the social security system which are designed to bolster up racism or achieve the destruction of the Welfare State?

Mr. Orme: I can express unqualified acceptance of that point of view. There was a headline in yesterday's Daily Express dealing with the increase in unemployment pay. I think that the figure quoted in that newspaper was £9·12. It suggested that this was a violation of the recent pay agreement. As usual, the Daily Express got it wrong. The figure is £5·95. The Government, however, are determined to ensure that people who are unemployed and disabled shall get the benefit to which they are entitled and that people who need supplementary benefits and pensions get those, too.

Mr. Patrick Jenkin: Has not a new dimension been introduced into this subject recently? Did the right hon. Gentleman see the report in Saturday's Daily Mail suggesting that some of the social security frauds are now being organised to provide funds for the IRA? Will he take seriously any recommendations which are put to him by the police to stop this deplorable traffic?

Mr. Orme: I am aware of those allegations. Obviously, my Department works very closely with the police. I would prefer not to comment on the case that the right hon. Gentleman has mentioned. We are aware of it and we shall examine the facts. There is, however, no doubt that organised crime has come into the system. We are trying to root it out. It is responsible for possibly more abuse than any other factor.

Mrs. Knight: On a point of order, Mr. Speaker. In view of the extraordinarily unsatisfactory nature of the Minister's answer, I give notice that I shall seek to raise the subject on the Adjournment at the earliest possible moment.

Mr. McNamara: On a point of order,
Mr. Speaker.

Mr. Speaker: Perhaps the hon. Gentleman will be kind enough to present it

after Questions. Questions to the Prime Minister are soon to begin.

Mr. McNamara: But you allowed the hon. Member for Birmingham, Edgbaston (Mrs. Knight) to raise a point of order, Mr. Speaker.

Mr. Speaker: Yes, but that was to enable her to give the customary notice.

Mr. McNamara: I too wish to give notice, Mr. Speaker. I wish to draw attention to the fact that many people are not getting what they are entitled to under the social security system.

Mr. Speaker: Order. The hon. Member has been here long enough to know the difference between a point of order and a point of view.

Shotley Bridge General Hospital, Consett

Mr. David Watkins: asked the Secretary of State for Social Services what measures he is taking to reduce the length of patients' waiting time for appointments with orthopaedic consultants at Shotley Bridge General Hospital, Consett.

Mr. Moyle: I am not happy about the length of time patients have to wait for an appointment to see an orthopaedic consultant at this hospital, and I have asked the Northern Regional Health Authority to investigate the underlying causes of the problem and consider whether the waiting time can be shortened. The results of its investigation, which is being conducted with all possible speed, are not yet available. I shall write to my hon. Friend as soon as I have received and considered the regional health authority's report.

Mr. Watkins: Is my hon. Friend aware that his unhappiness is shared by myself and large numbers of other people, not only in my constituency? The waiting time is two years. In spite of what my hon. Friend has said, there is no visible evidence of any sense of urgency on the part of the regional health authority.

Mr. Moyle: I take note of my hon. Friend's point of view. I shall make sure that a sense of urgency is encouraged upon the regional health authority.

Supplementary Benefit (European Community Country Citizens)

Mr. Rifkind: asked the Secretary of State for Social Services whether a citizen of the Republic of Ireland is entitled to more favourable treatment from the Supplementary Benefits Commission than a citizen of another EEC country.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): No, Sir. Both are treated alike.

Mr. Rifkind: Will the Minister indicate whether, in the payment of benefits to the citizens of the Irish Republic, cognisance is taken of the effect that discriminatory rates for British citizens and overseas citizens might have on movements over the Irish border?

Mr. Deakins: No cognisance is taken of that. We take cognisance of the European Covention which we and our EEC partners have signed. It ensures that citizens of one country who are resident in or visit another country are entitled to social assistance on the same basis as the nationals of the country visited.

Hospitals (Expenditure Economies)

Mr. Peter Morrison: asked the Secretary of State for Social Services whether he is aware of any impending strike action in hospitals by trade unionists opposed to public expenditure economies.

Mr. Ennals: No, Sir, although I know that concern is being expressed in other ways.

Mr. Morrison: Will the Secretary of State explain to the unions in the National Health Service that direct action will not change the Government's mind about public expenditure cuts?

Mr. Ennals: We shall not be influenced by unions, by doctors or by any others in the service who seek to take industrial action. The patients suffer when industrial action is taken, and I am certain that that cannot be right. I am sure that that would be condemned from both sides of the House.

Oral Answers to Questions — SCOTTISH TRADES UNION CONGRESS

Mr. Reid: asked the Prime Minister when he will next meet the STUC.

The Prime Minister (Mr. James Callaghan): I hope to meet the STUC again before the end of the year.

Mr. Reid: In view of today's depressing rise in Scottish unemployment, will the Prime Minister explain to ordinary Scottish trade unionists why, when our oil is keeping the United Kingdom afloat and the IMF happy, the Scottish Assembly should not have its own revenue access to that oil to help cure unemployment north of the border?

The Prime Minister: I am glad to say that, as in the remainder of the United Kingdom, unemployment among school leavers is very much better this month. I am sure that the hon. Member is pleased to note that it has fallen from about 15,300 to 10,600 this month. I am glad to say that there has also been a reduction in short-time working. A short while ago the number affected was 16,000, but this number has been reduced to 2,400. There has also been a fall in redundancies. I think, therefore, that the Scottish nation is still heavily against the SNP's demand for independence.

Mr. Corbett: When my right hon. Friend next meets the TUC will he be in a position to discuss with it the reported plans to give the National Enterprise Board some of the powers and responsibilities of the former Industrial Reorganisation Corporation to assist with much-needed mergers and to help with the reinvigoration of British industry?

The Prime Minister: Yes, we need to use all of those agencies, especially the Scottish Development Agency, which is a very useful weapon in the armoury for encouraging Scottish development. I am sorry to note that when the Leader of the Opposition went to Scotland she did not explain why she thought it necessary for the Conservative Party document to advocate weakening the powers of the SDA and removing some of its powers for encouraging industrial projects.

Mr. David Steel: When the Prime Minister next meets the STUC will he discuss with it its critical views, which are


widely shared in Scotland, about the lack of any economic or fiscal content in the Government's devolution proposals?

The Prime Minister: This matter will come before the House when all the issues are debated. I have discussed them with the STUC. Basically it broadly agrees with the Government's proposals as put forward in the White Paper, and I would have thought that that was a very good start to the debate.

Mr. Robert Hughes: When my right hon. Friend meets the STUC will he remind it of the very great efforts made by the Government to save the jobs of Chrysler workers and shipyard workers in Scotland, and say that the benefits to the people of Scotland of that approach are meaningful? Will he reject the attitude of the SNP Members who do not care about Chrysler workers in England?

The Prime Minister: Young as the SNP is, it has a past that is already beginning to catch up with it. To judge from The Scotsman today, Scottish opinion is catching up with it very fast. There is no doubt that the SNP will have to retreat from its demand for independence or the Scottish electors will soon see through its Members. I understand from Scottish opinion and I believe that the best way for us to proceed is to preserve the unity of the United Kingdom and that the measures produced by the Government, with whatever changes may be made as a result of deliberation in this House, should go through and provide widespread devolution.

Mr. Tapsell: When the Prime Minister next talks to trade union leaders will he explain to them how it is that when he took the opportunity on television last night to refer to the vast German currency reserves he failed to point out that they had been accumulated as a result of social and economic policies entirely different from those pursued by this Socialist Government?

The Prime Minister: There have been many differences between the German economic system and our own, including the total destruction of the German industrial system and the rebuilding of the trade union movement on an entirely different basis which does not fit our history. But one conclusion that I draw

and recommend to employers in this country and perhaps to the Opposition is that the system of industrial democracy in Germany is working extremely well, and that is why we propose that similar measures should be introduced here next Session.

Oral Answers to Questions — HARROW

Mr. Dykes: asked the Prime Minister what plans he has to pay an official visit to Harrow.

The Prime Minister: I have at present no plans to do so.

Mr. Dykes: Should not the Prime Minister come to Harrow to explain to my constituents just how much encouragement is being given to forces opposed to this country by his talk about NATO and his party inviting dubious characters from the Soviet Union?

The Prime Minister: I shall leave it to the hon. Gentleman to do that.

Mr. Atkinson: Will my right hon. Friend reconsider the answer in which he suggested that in the Queen's Speech in the next Session there will be an item about workers' democracy? Can he assure the House that once the Bullock Report is published trade unions will have adequate time for consultations before the Government set out on a Companies (No. 3) Bill to restructure management in industry, deal with the whole subject of worker directors and the whole business of moving towards a German concept of industrial democracy?

The Prime Minister: Adequate consultation about industrial democracy is important. I hope that when the Bullock Committee reports it will enable us to focus our discussion and that we shall be able to proceed to action in due course.

Mrs. Thatcher: May I return to the question asked by my hon. Friend the Member for Horncastle (Mr. Tapsell)? The Prime Minister will be aware that he made some very serious statements on television last night. May I ask him a straight question? Was he serious when he threatened to pull our troops out of NATO if he did not get more of other countries' money on his own terms?

The Prime Minister: If that is the right hon. Lady's idea of a straight question, I should like to know when she asks a crooked one. I suggest that the right hon. Lady reads the Question. I was dealing with an important matter that does not often appeal to the Opposition, namely, the fact that this country has a position of very great influence and importance in Europe. Because of this and because of the strength and stability that we give to central Europe through the important contribution of the British Army of the Rhine, attempts to disrupt the sterling system—or, indeed, our rate—and the consequences of such attempts or other adventitious factors due to the overhang of the sterling balances can lead to this country's influence being weakened.
The Federal Republic has reserves of $35 billion to $40 billion and more. If the Opposition wish to preserve Britain's political influence, which they very much value—and this is not a cheap party point but a very important issue—they should have regard to it in relation to the overhang of the sterling balances. It could be that the deutschemark value of sterling is heavily depreciated because of these factors. If the right hon. Lady reads the Question and Answer she will see that I was discussing how Britain's influence in central Europe can be maintained, not removed.

Mrs. Thatcher: The Prime Minister was not maintaining Britain's influence; he was degrading the whole of Britain's standing in the world. He not only debauched the currency but debased Britain. So long as he is there, the country's only prospect is debt and decay, and the best thing he can do is to go.

The Prime Minister: I am not sure how long it took the right hon. Lady to think that out, but, despite her tenacious attempt to gain power, I promise that I shall be here with this Government for a very long time.

Oral Answers to Questions — CITY OF LONDON

Mr. Ridley: asked the Prime Minister if he will pay an official visit to the City of London.

The Prime Minister: I refer the hon. Member to the reply which I gave to my

hon. Friend the Member for Thornaby (Mr. Wrigglesworth) on 19th October.

Mr. Ridley: Will the Prime Minister go to the City and explain what he meant when he said that IMF policies would cause the British economy to go into a downward spiral? Is it not correct that it is his policies and those of Socialism that have put the British economy into the present downward spiral? Will the Prime Minister do something to cut public expenditure and save the country's currency instead of trying to bite the hand that feeds it?

The Prime Minister: We have applied to the IMF for a loan. All sorts of stories are coming from apparently well-informed journalists but we have not yet begun discussions with the IMF.

Mr. Hugh Fraser: Why not?

The Prime Minister: We shall have to see what conditions it puts forward at the appropriate time.
As to cutting public expenditure and growth, I am sure that the hon. Gentleman will agree that we should go for a period of sustainable growth, and therefore it would not be right to accept conditions on such a loan that would prevent us from going for that sustainable growth.

Mr. Ashton: Does my right hon. Friend remember that on 11th March the Government took notice of the Opposition and cut £1 billion off public expenditure and the pound fell? Then, in July, they cut £2 billion off and the pound fell even more. Does he not think that he could save £600 million by pulling the troops out of Germany? That would be warmly welcomed by the Labour Party, Labour Members and the people of the country.

The Prime Minister: I do not think that my hon. Friend's figures for March and July are correct, but it is true that the cuts in public expenditure have not, as the Opposition said they would, had the effect of restoring confidence in sterling. [HON. MEMBERS: "They are not enough."] I see that hon. Members think that they are not enough. In that case it would be as well if we could have a straight answer from the Opposition about how much they really think would be enough.

Mr. Baker: Three weeks ago Helmut Schmidt said that the pound was undervalued. Why is it that in the past three weeks the Federal Government of Germany and the Bundesbank have not bought pounds since this would have driven up the price of sterling? Is it that Helmut Schmidt has decided that he no longer has confidence in the Prime Minister and his policies?

The Prime Minister: The hon. Gentleman knows better than that. The Federal Republic is in the fortunate position of not having a reserve currency and it will do its best to prevent itself from becoming a reserve currency country. Our situation is a relic of the sterling area days and it is a burden that we bear. The hon. Gentleman knows that the monetary policy of the Bundesbank is not a question for me.

Oral Answers to Questions — SELECT COMMITTEE ON SCIENCE AND TECHNOLOGY

Mr. Palmer: On a point of order, Mr. Speaker. May I raise with you a point of order which I believe is of general application to the proper working of the House of Commons. The Select Committee on Science and Technology, of which I am chairman, has a sub-committee looking at developments in Japanese industry which may be of possible application to, or hold lessons for, British industry. The subcommittee intends to visit Japan next week. All detailed arrangements have been made with Japanese industrial establishments. Today the Leader of the Opposition has instructed the Conservative Members of the sub-committee to withdraw from the visit—may I say to the great despair of the Conservative Members involved—

Mr. Speaker: Order. May I ask the hon. Gentleman to come to the point of order?

Mr. Palmer: The magic date of 7th November has been quoted, like the Ides of March. What can be done to protect the working of Select Committees of this House from arbitrary interference by leaders of any political party?

Mr. Speaker: The hon. Gentleman is an experienced Member of this House. He has been here a long time and he knows that that is not a point of order

for me. Arrangements between the parties are not my concern.

Mr. McNamara: Further to that point of order—

Mr. Speaker: Order. The hon. Gentleman cannot pursue that matter.

Mr. McNamara: On a new point of order, Mr. Speaker.

Mr. Speaker: It has not to do with the previous matter?

Mr. McNamara: No. I accept the point that you have made, that arrangements between the parties are of no concern of the Chair. However I suggest that the working of Select Committees is a matter for the House and a matter for you because they are Committees of this House. This is not the first occasion that the right hon. Lady has acted in this manner—

Mr. Speaker: Order. The hon. Gentleman knew that he would not be in order.

BRITISH ARMY OF THE RHINE

Mr. Mayhew: I beg to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter of which I have given you notice, Mr. Speaker, that should have urgent consideration; namely
The bringing into question by the Prime Minister of the continued commitment of BAOR to NATO in a public interview on 'Panorama' last night.
This matter is specific in that it relates to the continued deployment of the British Army of the Rhine. It is self-evidently important and it ought to have urgent consideration in that the commitment of Rhine Army to NATO is vital for the safety of this country.

Mr. Speaker: Before I give my decision may I say that that is the way to present an application under Standing Order No. 9, rather than making a long speech.
The hon. and learned Member asks to move the Adjournment of the House for the purpose of discussing an important matter that he thinks should have urgent consideration, namely
The continued deployment of the British Army of the Rhine.


As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I merely have to decide whether the issue raised should have precedence over the other business of the House.
I have given careful consideration to the representations made by the hon. and learned Member but I have to rule that his submission does not fall within the provisions of the Standing Order and I cannot, therefore, submit his application to the House.

Mr. Amery: On a point of order, Mr. Speaker. With very great respect and while in no way challenging your ruling, may I ask whether you have taken into account—

Mr. Speaker: Order. The right hon. Gentleman knows that I have taken everything into account and that it is not customary to challenge Mr. Speaker on a question of this sort. I hope that he is not seeking to do so.

Mr. Amery: It would not cross my mind to challenge your ruling, Mr.

Speaker. I only wanted to inquire whether a particularly relevant consideration had been brought to your notice, namely that there is a treaty commitment—

Mr. Speaker: Order. This matter cannot be pursued, because the right hon. Gentleman is seeking indirectly to challenge the decision I have given to the House.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Town and Country Planning Regulations 1976 (S.I., 1976, No. 1419) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Thomas Cox.]

BUSINESS OF THE HOUSE

Ordered,
That at this day's Sitting, Standing Order No. 3 shall apply to the Motion relating to the Housing (Northern Ireland) Order 1976 with the substitution of half-past Twelve o'clock or two and a half hours after it has been entered upon, whichever is the later, for the provisions in paragraph (b) of the Standing Order.—[The Prime Minister.]

NATIONAL FREIGHT CORPORATION (DENATIONALISATION)

3.37 p.m.

Mr. Ian Gow: I beg to move,
That leave be given to bring in a Bill to restore the National Freight Corporation and its subsidiaries to private ownership.
The National Freight Corporation and the National Bus Company were set up under the Transport Act 1968. On 3rd August I sought the leave of the House to introduce a Bill to denationalise the National Bus Company. It will be a matter of great regret to the House that leave was denied to me.
Today it is the turn of the National Freight Corporation. Section 41 of the Transport Act 1968 places a duty on the National Freight Corporation to break even financially, taking one year with another. However, the Corporation has been almost consistently in breach of that duty.
In 1974 the Corporation made a loss of £16 million and last year it made a record loss of £31 million. During the seven years that the Corporation has been in existence it has made an accumulated loss of £51 million. The purpose of my Bill is to put a stop to loss-making on this alarming scale. The failure of the Corporation to fulfil its statutory duty ought to oblige the Government to draw the appropriate lesson, namely that there is too close a relationship between nationalisation and loss-making. In any circumstances a loss of £31 million would require a radical remedy. When even this Government are beginning to understand that the burden of public debt can no longer be sustained, I propose the radical remedy of denationalisation which would liberate the National Freight Corporation from the sterile control of the Treasury Bench.
There is no reason why the Corporation and its subsidiaries should not be run profitably. The Corporation does not have a monopoly position like the National Bus Company or British Rail. On the contrary, it accounts for less than 15 per cent. of the total annual freight movement in the country. Whereas the private sector has, in the nature of things, been obliged to make a profit over these

last years, it is the Corporation alone which has been run at a loss.
The whole history of the Corporation is one of a saddening gap between promise and performance. In its first annual report, for 1969, presented to my right hon. Friend the Member for Yeovil (Mr. Peyton) when he was the responsible Minister, the objectives of the Corporation were summarised as follows:
Last, but not least, we seek to escape the frustrations and general failure which the Corporation will suffer unless it pays its way on a commercial basis.
Later, the immortal words appeared:
The fundamental aim at all times is to be non-monolithic, non-bureaucratic and non-subsidised.
The following are not the words of an unknown Member from a seaside resort. They are the words of the Chairman of the Corporation reporting to the Secretary of State. He said that the reality has been that nationalisation itself has been
…a bad practice reminiscent of mediaeval usury.
You, Mr. Speaker, are a saintly man—

Mr. Speaker: The hon. Gentleman still only has three minutes left.

Mr. Gow: That is more than can be said for the Secretary of State. But the Chairman of the Corporation has described the financial structure of the Corporation as being usury reminiscent of mediaeval times. The last verse of Psalm 15, which is possibly engraven upon your heart, Mr. Speaker, reminds us that the man—and I suppose, also the Government—who shall not fail is
He that hath not given his money upon usury, nor taken reward against the innocent.
The financial structure of the Corporation is usurious, and in permitting losses on this scale the Government are taking reward against the innocent—the taxpayer.
I do not blame the directors or the 44,000 men and women who work for the Corporation for these losses. They are the helpless victims of a system over which they have no control and for which they have increasing contempt. Fortunately, the ingenuity of man, with the support of the Conservative Party, has provided a ready solution. Competitive free enterprise and the disciplines of the market place will provide what the


politicians can never provide, a proper financial structure, sufficient investment, a competitive service to meet the needs of the public, and, above all, a profit.
It may be argued that my Bill will take up valuable parliamentary time. Not so. It will have two clauses only. There is no reason to believe that it will be delayed in another place. It will oblige the Secretary of State to sell the National Freight Corporation and its subsidiaries at the best possible price. Such a step would, to quote my right hon. Friend the Member for Sidcup (Mr. Heath), "at a stroke" reduce the Government's borrowing requirement and lighten the burden of the Secretary of State for Transport, who is not even in his place today. Indeed, if I had my way, I would continue the process of denationalisation of all the projects under his control so that he, too, would become redundant I commend the Bill to the House.

3.45 p.m.

Mr. Robin F. Cook: The hon. Member for Eastbourne (Mr. Gow) made great play of the fact that last year the National Freight Corporation suffered a deficit of £31 million. He follows these matters closely, and he must be aware that in the current year it has taken substantial strides towards reducing the deficit. [Laughter.] Clearly, hon. Members do not follow these things as closely as they might.
Only last Thursday, the Chairman of the Corporation, opening, I am glad to say, a new terminal in Scotland, announced that Freightliners Limited, which last year had lost £1 million, would have a surplus of £1 million this year. There is every reason to suppose that we shall see the National Freight Corporation as a whole moving from a deficit on trading account to surplus. In any year that would have been a remarkable achievement, but it is an even greater achievement in this year, a year of industrial recession, not marked by profitability in the private sector road haulage but rather by a large number of bankruptcies. Such a great achievement by the National Freight Corporation deserves better from this House than the hon. Member's doctrinaire jibes. We should pay tribute to the management and staff, who have worked together so well to bring about this achievement.
Even if we accept the depressing view of the hon. Member for Eastbourne that nationalised industries are necessarily associated with mounting and record deficits, he is proposing a curious remedy. He is saying that we should put up a sign at the headquarters of the Corporation, "for Sale", and that there should be a day when he gets up on a rostrum with a hammer and auctions off the Corporation in job lots. If he gets to that day, he will not find a shortage of buyers. At the start of the day, business men will be trampling over each other to get control of companies such as Pickfords, which last year declared, for the third year running, a record profit, and Tank Haulage, which doubled its profit last year. The Bill is being introduced because the private sector does not want to put up with the successful competition that these companies provide.
But as the day wears on, the bidders will get fewer. At the end of the afternoon, the hon. Gentleman will be left with National Carriers and Freightliners Ltd. He will then discover that there is only one bidder. There will be a moment of blind panic for him when he discovers that it is British Rail, from which National Carriers and Freightliners Limited came and which wants that business back on to rail. He will not want that, of course. He will then take National Carriers and sell it off in job lots. He will sell off the profitable assets, the attractive sites and the specialised lines, until at the end of the day he is left holding assets which no one wants and also the expensive commitment to the pensioners which no one will buy off him.
Thereby, we shall have a repetition of the experience of the denationalisation of British Road Services in 1953, when the nation was left with a loss-making company, with the profitable parts of the service sold off. Worse still, not only shall we be saddled with a loss-making enterprise but the hon. Gentleman will have destroyed a valuable national asset in a vital industry.
The National Freight Corporation is the one freight organisation in this country which straddles both rail and road. Many of us on this side of the House are disappointed that the Corporation has not shifted more traffic to rail, which was another obligation laid upon it by the 1968 Act. Indeed, only last year, National


Carriers halved the proportion of its traffic which goes by rail. It is difficult to reconcile that with the commitment it was given to put whatever scrap of freight it can on to the railways.
Nevertheless, if we are serious about wishing to turn our aim of an integrated transport system into reality, it makes no sense to dismember the one freight organisation which is intermodal on the principle of selling it to the highest bidder.
The hon. Gentleman said that the NFC is not a monopoly. That is right. However, he did the organisation less than justice in that respect. It is certainly not monolithic. It is genuinely regional in management structure. Nevertheless, it is by far the largest single major operator in the freight industry.
There are advantages to the whole industry in having one major operator with the sense of social responsibility that goes with being State owned. The NFC takes seriously, even if the Opposition do not, its role as a pacemaker in the haulage industry. In eight years, it has improved standards in conditions and standards of work, professional qualifications, technical innovation, such as the electrically operated Silent Karrier, and pioneered new markets such as waste recycling.
Moreover, the private sector recognises the valuable role of the NFC as a pacemaker within the industry. We know that, because the private sector is continually poaching Freight Corporation trained managers. We know it, too, because we have been through an extensive process of consultation on transport policy. In response to the consultative document, 1,000 replies were lodged with the Department. I defy the hon. Member

for Eastbourne to find one single document submitted by a significant haulage or road-based organisation which calls for the dismemberment of the NFC. There is not one.

Why does the hon. Member for Eastbourne seek to introduce such a measure? This is not the first Bill which he has introduced to denationalise a public undertaking. The hon. Gentleman has given us due warning that he intends to move through the public sector asking the question: what does it do and what can I do to stop it from doing it? It is a new dogmatism that anything which is public enterprise is bad and anything which is private enterprise is good.

Several times in the last month Labour Members have been asked by Opposition Front Bench spokesmen whether they have a committment to the mixed economy. I have no doubt about my commitment to a genuine mixed economy. Perhaps it is time that the Opposition Front Bench asked the hon. Member for Eastbourne and his colleagues whether they accept a mixed economy. In the meantime, I think that we should give the Opposition Front Bench the opportunity to stand up and be counted for the mixed economy by coming out in defence of the State's modest, but valuable, stake in the freight business.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 165, Noes 168.

Division No. 343.]
AYES
[3.55 p.m.


Adley, Robert
Clark, William (Croydon S)
Farr, John


Arnold, Tom
Clarke, Kenneth (Rushcliffe)
Finsberg, Geoffrey


Atkins, Rt Hon H. (Spelthorne)
Clegg, Walter
Fry, Peter


Awdry, Daniel
Cooke, Robert (Bristol W)
Gilmour, Rt Hon Ian (Chesham)


Baker, Kenneth
Cope, John
Goodhart, Philip


Bennett, Sir Frederic (Torbay)
Cormack, Patrick
Goodhew, Victor


Benyon, W.
Corrie, John
Goodlad, Alastair


Berry, Hon Anthony
Costain, A. P.
Grant, Anthony (Harrow C)


Biggs-Davison, John
Crawford, Douglas
Grieve, Percy


Blaker, Peter
Crouch, David
Griffiths, Eldon


Boscawen, Hon Robert
Dean, Paul (N Somerset)
Grimond, Rt Hon J.


Bottomley, Peter
Dodsworth, Geoffrey
Grist, Ian


Boyson, Dr Rhodes (Brent)
Douglas-Hamilton, Lord James
Grylls, Michael


Braine, Sir Bernard
Drayson, Burnaby
Hall, Sir John


Brittan, Leon
Dunlop, John
Hall-Davis, A. G. F.


Brocklebank-Fowler, C.
Eden, Rt Hon Sir John
Hamilton, Michael (Salisbury)


Brown, Sir Edward (Bath)
Edwards, Nicholas (Pembroke)
Hampson, Dr Keith


Bulmer, Esmond
Emery, Peter
Hannam, John


Butler, Adam (Bosworth)
Eyre, Reginald
Harrison, Col Sir Harwood (Eye)


Carlisle, Mark
Fairbairn, Nicholas
Harvie Anderson, Rt Hon Miss


Clark, Alan (Plymouth, Sutton)
Fairgrieve, Russell
Hastings, Stephen




Hawkins, Paul
Mills, Peter
Shaw, Giles (Pudsey)


Hayhoe, Barney
Mitchell, David (Basingstoke)
Shelton, William (Streatham)


Hicks, Robert
Moate, Roger
Shepherd, Colin


Higgins, Terence L.
Molyneaux, James
Silvester, Fred


Holland, Philip
Monro, Hector
Sims, Roger


Hordern, Peter
Montgomery, Fergus
Sinclair, Sir George


Howe, Rt Hon Sir Geoffrey
Moore, John (Croydon C)
Skeet, T. H. H.


Hurd, Douglas
More, Jasper (Ludlow)
Speed, Keith


Hutchison, Michael Clark
Morgan, Geraint
Spicer, Michael (S Worcester)


James, David
Morrison, Charles (Devizes)
Sproat, Iain


Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Morrison, Hon Peter (Chester)
Stainton, Keith


Jessel, Toby
Mudd, David
Stanley, John


Kershaw, Anthony
Neave, Airey
Steel, David (Roxburgh)


King, Tom (Bridgwater)
Nelson, Anthony
Steen, Anthony (Wavertree)


Knight, Mrs Jill
Newton, Tony
Stewart, Ian (Hitchin)


Lamont, Norman
Nott, John
Stradling Thomas, J.


Lane, David
Onslow, Cranley
Taylor, Teddy (Cathcart)


Lawson, Nigel
Page, John (Harrow West)
Tebbit, Norman


Le Marchant, Spencer
Page, Rt Hon R. Graham (Crosby)
Thatcher, Rt Hon Margaret


Lloyd, Ian
Paisley, Rev Ian
Thomas, Rt Hon P. (Hendon S)


Loveridge, John
Pardoe, John
Vaughan, Dr Gerald


Luce, Richard
Parkinson, Cecil
Wainwright, Richard (Colne V)


McAdden, Sir Stephen
Pattie, Geoffrey
Wakeham, John


McCrindle, Robert
Penhaligon, David
Walters, Dennis


Macfarlane, Neil
Powell, Rt Hon J. Enoch
Weatherill, Bernard


MacGregor, John
Pym, Rt Hon Francis
Wells, John


Macmillan, Rt Hon M. (Farnham)
Rathbone, Tim
Whitelaw, Rt Hon William


Marten, Neil
Renton, Rt Hon Sir D. (Hunts)
Winterton, Nicholas


Mates, Michael
Renton, Tim (Mid-Sussex)
Wood, Rt Hon Richard


Mather, Carol
Rifkind, Malcolm
Young, Sir G. (Ealing, Acton)


Maude, Angus
Roberts, Michael (Cardiff NW)
Younger, Hon George


Mawby, Ray
Roberts, Wyn (Conway)



Maxwell-Hyslop, Robin
Rodgers Sir John (Sevenoaks)
TELLERS FOR THE AYES:


Mayhew, Patrick
Rossi, Hugh (Hornsey)
Mr. Ian Gow and


Meyer, Sir Anthony
Rost, Peter (SE Derbyshire)
Mr. Nicholas Ridley.


Miller, Hal (Bromsgrove)






NOES


Allaun, Frank
Ennals, David
Mabon, Dr J. Dickson


Archer, Peter
Evans, Fred (Caerphilly)
McCartney, Hugh


Armstrong, Ernest
Evans, Ioan (Aberdare)
McDonald, Dr Oonagh


Ashton, Joe
Flannery, Martin
McElhone, Frank


Atkinson, Norman
Fletcher, Ted (Darlington)
MacFarquhar, Roderick


Bates, Alf
Forrester, John
MacKenzie, Gregor


Benn, Rt Hon Anthony Wedgwood
Garrett, John (Norwich S)
McMillan, Tom (Glasgow C)


Bennett, Andrew (Stockport N)
Garrett, W. E. (Wallsend)
Madden, Max


Bidwell, Sydney
George, Bruce
Marks, Kenneth


Bishop, E. S.
Gould, Bryan
Marshall, Dr Edmund (Goole)


Blenkinsop, Arthur
Graham, Ted
Maynard, Miss Joan


Booth, Rt Hon Albert
Grant, George (Morpeth)
Mellish, Rt Hon Robert


Bottomley, Rt Hon Arthur
Grant, John (Islington C)
Mikardo, Ian


Boyden, James (Bish Auck)
Grocott, Bruce
Millan, Rt Hon Bruce


Bray, Dr Jeremy
Hamilton, James (Bothwell)
Miller, Dr M. S. (E Kilbride)


Brown, Hugh D. (Provan)
Hardy, Peter
Murray, Rt Hon Ronald King


Brown, Robert C. (Newcastle W)
Harper, Joseph
Newens, Stanley


Buchan, Norman
Harrison, Walter (Wakefield)
Ogden, Eric


Buchanan, Richard
Hatton, Frank
O'Halloran, Michael


Callaghan, Jim (Middleton &amp; P)
Heffer, Eric S.
Orme, Rt Hon Stanley


Campbell, Ian
Hooley, Frank
Owen, Rt Hon Dr David


Cant, R. B.
Horam, John
Park, George


Carmichael, Neil
Hoyle, Doug (Nelson)
Pavitt, Laurie


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)
Price, William (Rugby)


Castle, Rt Hon Barbara
Hughes, Roy (Newport)
Radice, Giles


Clemitson, Ivor
Hunter, Adam
Rees, Rt Hon Merlyn (Leeds S)


Cocks, Rt Hon Michael (Bristol S)
Irvine, Rt Hon Sir A. (Edge Hill)
Roberts, Albert (Normanton)


Cohen, Stanley
Irving, Rt Hon S. (Dartford)
Robinson, Geoffrey


Coleman, Donald
Jay, Rt Hon Douglas
Roderick, Caerwyn


Colquhoun, Ms Maureen
Jenkins, Hugh (Putney)
Rodgers George (Chorley)


Cook, Robin F. (Edin C)
John, Brynmor
Roper, John


Corbett, Robin
Johnson, James (Hull West)
Rowlands, Ted


Cox, Thomas (Tooting)
Johnson, Walter (Derby S)
Ryman, John


Cronin, John
Judd, Frank
Sandelson, Neville


Cryer, Bob
Kaufman, Gerald
Sedgemore, Brian


Davidson, Arthur
Kelley, Richard
Selby, Harry


Davies, Bryan (Enfield N)
Kilroy-Silk, Robert
Shaw, Arnold (Ilford South)


Davis, Clinton (Hackney C)
Lambie, David
Sheldon, Robert (Ashton-u-Lyne)


Deakins, Eric
Lamond, James
Short, Mrs Renee (Wolv NE)


Dean, Joseph (Leeds West)
Latham, Arthur (Paddington)
Silverman, Julius


Dempsey, James
Leadbitter, Ted
Skinner, Dennis


Doig, Peter
Lewis, Ron (Carlisle)
Small, William


Dormand, J. D.
Lipton, Marcus
Smith, John (N Lanarkshire)


Edge, Geoff
Litterick, Tom
Spearing, Nigel


Edwards, Robert (Wolv SE)
Loyden, Eddie
Spriggs, Leslie


Ellis, John (Brigg &amp; Scun)
Lyon, Alexander (York)
Stallard, A. W.




Stoddart, David
Walker, Harold (Doncaster)
Williams, Sir Thomas (Warrington)


Stott, Roger
Walker, Terry (Kingswood)
Wilson, Alexander (Hamilton)


Strang, Gavin
Ward, Michael
Wilson, William (Coventry SE)


Strauss, Rt Hon G. R.
Watkins, David
Wise, Mrs Audrey


Summerskill, Hon Dr Shirley
Watkinson, John
Woodall, Alec


Taylor, Mrs Ann (Bolton W)
Weetch, Ken
Wrigglesworth, Ian


Thorne, Stan (Preston South)
Weitzman, David
Young, David (Bolton E)


Tierney, Sydney
While, Frank R. (Bury)



Tinn, James
White, James (Pollock)
TELLERS FOR THE NOES:


Tomlinson, John
Whitlock, William
Mr. Dennis Canavan and


Urwin, T. W.
Williams, Alan Lee (Hornch'ch)
Mr. Kevin McNamara.


Wainwright, Edwin (Dearne V)

Question accordingly negatived.

ROYAL ASSENT

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Chronically Sick and Disabled Persons (Amendment) Act 1976
2. Domestic Violence and Matrimonial Proceedings Act 1976

3. Maplin Development Authority (Dissolution) Act 1976
4. Armed Forces Act 1976
5. Resale Prices Act 1976
6. Trinidad and Tobago Republic Act 1976
7. Coity Wallia Commons Act 1976
8. Methodist Church Act 1976

Orders of the Day — INSOLVENCY BILL [Lords]

As amended (in the Standing Committee), considered.

New Clause 1

ADVISORY COMMITTEE ON BANKRUPTCY AND WINDING UP RULES

(1) There shall be a committee appointed by the Lord Chancellor to keep under review the rules for the time being in force under—

(a) section 132 of the Bankruptcy Act 1914 (bankruptcy rules); and
(b) section 365 of the Companies Act 1948 (winding up rules);

and to make recommendations to the Lord Chancellor as to any changes in the rules that may from time to time appear to the committee to be desirable.

(2) The Lord Chancellor may consult the committee before making any rules under the provisions mentioned in subsection (1) above.

(3) Subject to subsection (4) below, the committee shall consist of—

(a) a judge of the High Court attached to the Chancery Division;
(b) a circuit judge;
(c) a registrar in bankruptcy of the High Court;
(d) a registrar of a county court;
(e) a practising barrister;
(f) a practising solicitor; and
(g) a practising accountant.

(4) The Lord Chancellor may appoint as additional members of the committee any persons appearing to him to have qualifications or experience that would be of value to the committee in considering any matter with which it is concerned.—[Mr. Clinton Davis.]

Brought up, and read the First time.

4.2 p.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis): I beg to move, That the clause be read a Second time.
The purpose of the clause is to establish a committee which will be under a statutory duty to keep the bankruptcy and winding-up rules under review and to make recommendations to the Lord Chancellor about any changes in the rules which the committee deems it to be desirable. In addition, the Lord

Chancellor will be obliged to consult the committee before exercising his existing powers to make bankruptcy or winding-up rules.
The committee will comprise four members of the judiciary, two members of the legal profession and an accountant, all of whom are to be appointed by the Lord Chancellor, and such additional members as the Lord Chancellor might appoint.
Power to make general rules for carrying into effect the objects of the Bankruptcy Act 1914 and the Companies Act 1948, so far as it relates to the winding-up of companies in England, is given to the Lord Chancellor with the concurrence of the Secretary of State under Section 132 of the 1914 Act and Section 365 of the 1948 Act respectively. This power is exercisable by Statutory Instrument which is required to be laid before Parliament after being made.
In Committee, the Opposition moved New Clause 6, which was designed to do very much the same as we are achieving here. The arguments adduced by the Opposition reflected the then view of the Law Society and Bar Council Joint Working Party which at that time was pressing for a rule-making committee similar to those concerned with the Supreme Court and County Court Rules.
The main objection, which I stated in Committee, to the establishment of a rule-making committee as opposed to an advisory committee is that bankruptcy and companies winding-up rules are not exclusively concerned with court procedure, as are the Supreme Court and County Court Rules. Many of them deal with matters of an administrative nature in regard to the duty of official receivers and the exercise by the Secretary of State of his powers under the Acts and the two kinds of rules tend to be intermixed. Whilst, therefore, the advisory committee will be consulted even on rules dealing only with administrative matters, it is desirable for the Lord Chancellor, with the concurrence of the Secretary of State, to retain the power to make the rules, as opposed to having merely a power of veto.
The proposed advisory committee will be composed of members of similar status and profession to those who would be members of a rule-making committee so


that their advice would have strong persuasive authority.
The functions of the proposed committee will relate only to bankruptcy and winding-up rules in England and Wales. No arrangements require to be made for Scotland, where the practice is governed by Rules of Court.
As on a variety of other matters concerning the Bill, as will be evidenced by some of the amendments that I shall be moving later, I have had the happy experience of entering into very full personal consultations with the professional bodies concerned in these matters. The new clause reflects an accommodation between the Department and the views of the professional bodies which I think is a happy one. I feel confident that the hon. Member for Worthing (Mr. Higgins) will support me, and I know that it has the support of those professional bodies with whom I have engaged in these fruitful discussions.

Mr. Terence Higgins: As the Under-Secretary of State has pointed out, this matter was debated at length in Committee and is reported in the Official Report of Standing Committee C proceedings on 17th June 1976 at c. 509–517. The point was raised by my hon. and learned Friend the Member for Southport (Mr. Percival), who unfortunately is unable to be with us immediately but hopes to join us a little later in our proceedings.
As this is the first new clause and the first matter that we are debating today, perhaps I might say that I think that the changes which the Government have put forward on the Order Paper by way of amendment will, if carried, represent a significant improvement in the Bill. This is something of a triumph for a sensible approach by the Opposition and a sensible and responsible approach by the Government. Would that it were always so. I hope that as a result of this sensible approach we shall make reasonably rapid progress.
My only regret is that I was unable to persuade the Under-Secretary of State and the Chief Whip a few nights ago to transfer some of the business on the Companies (No. 2) Bill to today, when we could have debated it at a more reasonable hour than we did then, having continued on that occasion until after 6 o'clock in the

morning. It is important that these technical matters, which are not controversial—there is no question of marching troops through the Lobby—should be debated at a reasonable time of day, because one needs to be conversant with the content and also aware of what the Government are doing.
I would not wish to object to the proposal which the Government have now put forward for a committee. There is, I think, perhaps some difference of opinion—indeed, one of my hon. Friends may wish to stress this—on the extent to which we want to proliferate committees of this kind. The precise status of this particular body is of interest, as was brought out by my hon. and learned Friend the Member for Southport in Committee, reported at c. 510. He questioned precisely whether the Lord Chancellor should retain a veto and whether the body set up should be an advisory body.
I understand from the Under-Secretary of State—I think I quote him correctly—that the committee will be such that the Lord Chancellor will be obliged to consult it. That is an important point. It will not be simply a body which may or may not be consulted. It will be a matter of obligation. That is important and it is consistent with the view that we have previously put forward.
The Under-Secretary of State emphasised the fact that the Rules Committee is not exclusively concerned with court procedure and that it therefore presented some problems to him initially. He went on to say that it would have persuasive authority. I think that that is perhaps a little dangerous and may be a contradiction in terms, but at all events I do not doubt that the Lord Chancellor's Department will take account of the view which such a committee, if we agree to its establishment, will express.
As to the importance of consultation, had there been adequate consultation on the Bill at the outset both with the Bar Council and the Law Society, a great many of the amendments which have now been accepted would have been incorporated in the original Bill. But this is a matter with which we are rightly concerned here. We put forward the argument and seem on this occasion to have persuaded the Under-Secretary of State to accept the view which we put forward.
The Government have now announced—although I am doubtful whether it is really new or a repetition of what was said in Committee—a more wide-ranging review of the insolvency laws. It may be that in the light of experience we shall need to look at this aspect of the question again, but for the moment I am content not to dissent from the new clause. It should fulfil a useful purpose. We should let it go at this stage, and hope that in practice it turns out to be an effective way of achieving our objectives, namely, an insolvency law for this country and a procedure in court on insolvency law which are satisfactory both to creditors and to debtors.

4.15 p.m.

Mr. John Cope: I shall not detain the House very long, sparsely attended as it is. The obvious lack of interest by the House in this measure does not, nevertheless, deter me from registering one point to which my hon. Friend the Member for Worthing (Mr. Higgins) referred briefly in passing.
My heart grows heavy every time we set up a new committee in this House. I am not clear why it is necessary that the committee to be set up under the new clause should be written into law. I think it could have been set up even outside the law. I realise that my hon. Friends on the Front Bench support the new clause, and I have read the debates which took place about it in Committee upstairs, and in the Second Reading Committee, which was also upstairs. Nevertheless, here it is, going forward into law.
It is not with this proposed committee only that I am concerned. Hon. Members will be aware, from the Written Answers yesterday, and from a reference that my hon. Friend made, that there is to be in effect a new Blagden Committee set up under Mr. Kenneth Cork, than whom nobody knows more about this matter or is more competent to review it. But this is, nevertheless, all part of the over-elaborate process of consultation which we are setting up today in all kinds of fields.
The insolvency law is, of course, important, and never more than today, when so many people, unfortunately, are coming in touch with this part of the law because of the way their own affairs have turned out. Nevertheless, to have two

new committees set up, to postpone the major decisions again, and to have constant review and constant change as the only prospect for the law on insolvency for another few years, is depressing to me.
In the Second Reading Committee, brushing against this point, the Under-Secretary of State said:
I should inform the Committee that the Department has started on a review".
This was in effect, not a review of the matters concerned in this clause but a review being set up under Mr. Cork. The Under-Secretary of State went on to say that this was
a major and daunting task."—[Official Report, Second Reading Committee, 3rd March 1976; c. 1460.]
It does not seem to have taken long to daunt the Government, because they have now handed it on to somebody else—in fact, to Mr. Cork. Certainly those words have proved true in the six months since the Second Reading Committee.
It is a depressing prospect for practitioners. I am a chartered accountant but have never been active in this part of my profession's activities. It is a daunting prospect for practitioners to think that not only do we have this Bill, which itself changes the law, but also two committees which will make future reviews.
For these reasons, therefore, although I shall not oppose the new clause, I shall see it go through with a heavy heart.

Mr. Clinton Davis: I feel that I ought to reply briefly to the points which have been made primarily by the hon. Member for Gloucestershire, South (Mr. Cope), because I take a wholly different view of the value of consultation—perhaps as a result of experience on this Bill, but certainly for wider reasons than that—than that which he takes. I wish to make it quite clear that this rule-making advisory body is wholly distinct from the Cork Committee, the setting up of which was announced on 25th October.
We are seeking to accommodate views which have been expressed to us very forcibly by the profession, which is very much concerned with the administration of these rules. This point was very well articulated by the hon. and learned Member for Southport (Mr. Percival) during the Committee stage, and I need not rehearse those arguments.
It is quite clear from the contribution of the hon. Member for Worthing (Mr. Higgins) that certainly the two Front Benches at least are now ad idem on this. I am sorry that we cannot carry the hon. Member for Gloucestershire, South with us. He will not go as far as to take this matter to a Division, but he is not with us in his heart.
I do not think that either the Cork Committee or the committee which we are now discussing represent an overelaborate process of consultation. Insolvency law affects practitioners. They are the experts. I have experts in my Department, but I am not sure that they, having considered the response to letters sent out to about 40 professional and commercial bodies in January, would regard themselves as the right people to carry out this wide-ranging review. This matter is not party-politically contentious, but it could become contentious—as I have learned—if we did not consult in the right way at the right time.
We have to take into account the dramatic effects of EEC legislation upon our insolvency law and we have to try to deal with the deep and difficult problems posed in Committee. I am convinced that the right way to go about this is to consult widely and to try to reach agreement. If that is not possible, it is for the Government to make their judgment on the matter. I do not agree with the philosophy of the hon. Member for Gloucestershire, South.

Mr. Dennis Skinner: I wish to intervene briefly because I was involved on the edge of bankruptcy proceedings only a short time ago. I disagreed with my hon. Friend the Under-Secretary when he said this was not a party political question. It may not be party political in the sense that the two Front Benches seem to be able to get together on matters of this kind, but I take the view, based on my limited experience, that, in practice, the attitude and disposition of those who carry out bankruptcy proceedings leans towards those in business and leans upon those such as my brothers and their nine colleagues in the Clay Cross bankruptcy proceedings.
I know that you may take the view, Mr. Speaker, that mention of Clay Cross is alien to the proceedings of this House and that we should not be debating it, but

as far as I am concerned they are the 11 people most recently made bankrupt and I wish to compare their bankruptcy proceedings and the way in which they were pushed around with the way in which some business men have been dealt with.
Kenneth Cork provides a wonderful comparison with the way in which the honourable people at Clay Cross were dealt with. I want the Minister to bear in mind the case of 65-year old caretaker George Goodfellow, who was retiring from work after a lifetime of clocking-on and clocking-off—unlike many bankrupt business men. George had days, months and years of slogging away at his job and when, following legislation in this House, he received a cheque for £174 after the Court Line disaster, in which he lost his holiday and his money, along came the Official Receiver, acting in a political fashion, and said to little old George, an ex-Clay Cross councillor who had retired and was living on a paltry pension, that he was going to twist and squeeze every possible penny out of George because he had been made bankrupt.
Not only did the Official Receiver take that £174 cheque, but he also took old George's car, which was several years old and not worth a tremendous amount. It was offered back to George at a certain price.
This is one side of the coin—a 65-year old man who had slogged hard all his life, worked honourably on behalf of his party and, in my opinion, done nothing wrong, but attempted only to serve his fellow men. Now that he has retired and paid over what few assets he had to the Official Receiver, he has been asked to pay back £112 in income tax. This is a scandal.
I have no doubt that these matters were not discussed in Committee. As far as the elitists in this House are concerned, bankruptcy proceedings relate only to those in business. I have no doubt that the people who were trampled on at Clay Cross were given no consideration.
I want the Under-Secretary to bear in mind what I have told him about little George Goodfellow, an honourable man who, at the age of 65, is being tackled in a ferocious manner and asked to payback £112 in income tax despite the fact that he has already handed over his car, a cheque for £174 and other belongings. It is a disgrace.
On the other side of the coin we have Kenneth Cork, who is in charge of this important committee. Have his credentials been fully examined? I saw him on television the other night when he was supposed to be looking into Great Britain's accounts in a half-hour programme on ITV. Let us examine what this so-called great expert has been up to.
Acting as Official Receiver in the £110 million Nation Life bankruptcy disaster, this same Kenneth Cork of W. H. Cork, Gully and Company recommended to the creditors that because William Stern had so few assets in comparison to the £110 million which went down the drain in this property scandal arising out of the Barber boom, the property chief should not be made bankrupt but should be allowed £20,000 a year to live on because he had been used to a life of grandeur. Cork made this astounding proposition and also recommended that should Stern earn or pick up any money above the £20,000 a year, two-thirds of it should go to the shareholders.

Mr. Tim Renton: On a point of order, Mr. Deputy Speaker. If the hon. Member for Bolsover (Mr. Skinner) had read our Committee proceedings, he would know that, contrary to what he has just said, we spent a considerable time considering the problems of the small man who went into bankruptcy. We discussed this problem on a number of occasions. What the hon. Member is saying has nothing to do with the new clause under discussion.

Mr. Skinner: It is not my job to tell you how to conduct the affairs of the House, Mr. Deputy Speaker, but the remarks of the hon. Member for Mid-Sussex (Mr. Renton) were not a point of order but a matter of argument.
I am trying to bring to the notice of the House something of great importance. The hon. Member may be right and discussions may have taken place in Committee, but no doubt they were about small business men. That is precisely my point. There may have been discussions about those who go bankrupt. I am talking about a special set of circumstances that involves 11 people and has resulted in hardship for several of them. I am trying to counterpose the alternative suggestions made by the so-called expert,

Kenneth Cork, who has been promoted as one of the most important accountants in the land. I want to remind the House of what this man has been up to.

4.30 p.m.

Mr. Higgins: I am still not clear about what this has to do with the new clause.

Mr. Skinner: I appreciate the point already made by my hon. Friend the Under-Secretary, when he made it clear to the hon. Gentleman that the Cork Committee was a different thing from the Standing Committee. However, I must remind the hon. Gentleman that this is a debate and not a series of statements. People do not rise in this Chamber and trot out a statement, to be followed by someone else trotting out another statement. I am attempting to bring to the notice of the House, and to anyone else who cares to listen to me or to read my remarks, the fact that arising out of references to the Cork Committee, perhaps it would be a good idea for someone else to remind the House of what Mr. Kenneth Cork has been dealing with recently.
Mr. Cork was the man who made the preposterous suggestion that William Stern, who had been in charge of a company that lost £110 million in the property boom, should have £20,000 a year on which to live because he had been used to a life of grandeur. It was Kenneth Cork who was making that recommendation to the creditors. That should be considered in relation to the way in which the 11 Clay Cross councillors were dealt with in bankruptcy proceedings.
My hon. Friend the Under-Secretary should bear in mind that bankruptcy proceedings are not merely about big business men or small business men who go bankrupt. They are about other people, as well. In this case, they are about principled people. When these recommendations are looked at in future, the House should not be leaning upon those involved in bankruptcy proceedings, such as the 11 Clay Cross councillors. I want my hon. Friend—if it is possible, through his officials—to look at the way in which some of these councillors are being dealt with at present and to see that they are not leaned on any more. That is the reason for my intervention, and I think that it is worth while.

Mr. Clinton Davis: I understand the sentiments of my hon. Friend the Member for Bolsover (Mr. Skinner). He was intimately connected with those involved in the recent bankruptcy arising out of the Clay Cross episode. However, what he has said does not represent, unfortunately, anything but the most unfair attack upon officials in my Department, trustees and liquidators, who must carry out their job acording to the law. I ask my hon. Friend to understand that they do not inspire bankruptcy proceedings. Bankruptcy proceedings occur because there is a judgment that must be enforced, and it is their job to enforce it. It is not for them to enter into the merits or demerits of the situation that led to the bankruptcy.

Mr. Alan Clark: Does it not remain true that there is something here of considerable public concern? That is that where prominent people become insolvent, for reasons that may or may not be disreputable, they appear to be given preferential treatment in certain circumstances. There appears to be some kind of general consensus that they should be allowed to preserve vestiges of the way of life that they formerly enjoyed.

Mr. Davis: There is absolutely no merit in pursuing this argument at this stage. We should be going on for a long time, and anyway, it has no relevance to the subject matter of the debate. I do not agree with the hon. Gentleman.
Be that as it may, if the official receiver, the liquidator or the trustee fail to carry out the responsibilities imposed upon them by law, or if they act over-zealously in the implementation of those duties, there is a recourse to the courts. That is something that is available to the creditors. That is the safety net. It is no use my hon. Friend the Member for Bolsover ignoring that fact. If he feels that a particular debtor or group of debtors has been dealt with unfairly by the official receiver or someone else, there is always the availability of a recourse to the courts. That is something that my hon. Friend, in alliance with the hon. Member for Plymouth, Sutton (Mr. Clark)—a somewhat strange alliance—must not overlook, and it would be quite wrong for the House to overlook that point.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

OTHER PROVISIONS ABOUT ADMINISTRATION ORDERS.

'(1) Section 21 of the Administration of Justice Act 1965 and section 4(3) of the Attachment of Earnings Act 1971 (under which an application for an administration order and the making of an order requiring the debtor to furnish a list of creditors with a view to the making of an administration order constitute an act of bankruptcy) shall cease to have effect.

(2) In section 4(1)(a) of the said Act of 1971 (power to make administration order on application for attachment of earnings order) for the words "an order should be made for the administration of his estate" there shall be substituted the words "an administration order should be made".'.—[The Solicitor-General.]

Brought up, and read the First time.

The Solicitor-General (Mr. Peter Archer): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Government Amendments Nos. 16, 18, 19, 43 and 44.

The Solicitor-General: I shall be dealing with some fairly technical matters, but that is my function. I begin by commenting that later on the Amendment Paper there is an amendment, No. 15, to delete Clause 10. That amendment stands in the names of Opposition Members. It may be that when the House debates that amendment I shall be able to say something that will evoke a welcome from the hon. and learned Member for Southport (Mr. Percival). The reason for that and the events leading up to that outcome are perhaps best reserved until later.
However, when these matters were discussed in Committee it was on the assumption that Clause 10 would remain part of the Bill. I listened to what was said in Committee by the hon. Member for Worthing (Mr. Higgins) and the hon. and learned Member for Southport. I hope that I listened sympathetically. I related what I heard to my noble Friend the Lord Chancellor.
These are technical matters. There was no point in making a party issue out of


them. Where we could meet the objections pointed out, we endeavoured to do so. That was the purport of Amendments Nos. 16, 17 and 18. That no longer arises, so I do not propose to move Amendment No. 16 or Amendment No. 18 in this group, or, subsequently, Amendment No. 17. Having accepted the proposals to improve Clause 10, I propose in due course to accept an amendment to delete Clause 10 itself. But there is virtually no limit to the extent to which we are now seeking to accommodate Opposition Members. Because those discussions shed some light on provisions that were already on the statute book, it was thought that the same arguments ought to be applied.
I shall try briefly to explain the purpose of some of the other amendments in the group. Amendment No. 16 was tabled to meet a difficulty raised by the hon. and learned Member for Southport. He pointed to the expression in Clause 10
an order providing for the administration of his estate",
which refers to an administration order. The hon. and learned Member said that that expression was misleading because it presents a picture of a court or of someone else realising the debtor's assets and, in a sense, distributing them. As he put it, it was, "We shall do this with that land; we shall do this with that bank account; we shall do this with that business", and so on. He pointed out, with some force, that that is not what happens in fact. The principal purpose in any event of an administration order is to order the debtor to pay by instalments and chiefly out of future income.
The hon. and learned Member for Southport said that those words were misleading and the proposal was simply to change them to the words "administration order". Those words were not unique to this Bill. They occur in Section 4(1)(a) of the Attachment of Earnings Act 1971, and the purpose of New Clause 2(2) is to make an identical amendment in relation to that provision.
Another matter which originally arose under Amendment No. 18—Clause 10(5) had it remained in the Bill—referred to the order by the court to furnish a list of creditors, that is prior to considering whether to make an administration

order. It provided that this order should be an act of bankruptcy. The hon. Member for Worthing pointed out that this did not meet with universal satisfaction. The purpose had been to protect the creditor. Since an administration order might deprive a creditor of remedies which were otherwise available to him, it was felt that he ought to have an opportunity of presenting a bankruptcy petition between the making of the order for the list and the making of the administration order.
It was intended to give him that opportunity during the interval between the two orders. That might have been difficult, because there might have been no other act of bankruptcy by which he could proceed and, therefore, it was proposed to make the order for the making of the list itself an act of bankruptcy.
That was the reason for including the provision, but since our discussions in Committee my noble Friend and I have made some inquiries. It transpires that the similar provisions in the Acts of 1965 and 1971 are not frequently used and we concluded that on balance they brought very little benefit to creditors to offset the obvious burden on debtors. New Clause 2(1) repeals those provisions—Section 21 of the Administration of Justice Act 1965 and Section 4(3) of the Attachment of Earnings Act 1971. That is the purpose of New Clause 2 and I thought it right to explain it to the House.
Amendments Nos. 19, 43 and 44 are all consequential on New Clause 2 and I propose to move those formally when their turn is reached. There is also an amendment consequential on No. 15. It may be as well to give notice that I have prepared that in manuscript form. When we reach Clause 12, I shall seek to move it.

Mr. Higgins: I intervene only briefly. It may be that my hon. and learned Friend the Member for Southport (Mr. Percival) will also wish to say something about the new clause. The Solicitor-General has said that there is no limit to the extent to which the Government are prepared to go to meet the Opposition. I think there probably is a limit and I suspect that it has been reached. It appears to be 100 per cent. We are grateful to the Solicitor-General for that.


I think it is the case, following the consultation, that we had not given careful thought to these highly technical matters. We are glad that the Government have seen fit on this occasion to meet the point we make.

4.45 p.m.

We are particularly glad to learn that when we come to Clause 10 the Government will accept our amendment to delete that clause. My hon. and learned Friend the Member for Southport has pointed out that it seems to be of no advantage and, indeed, of some considerable disadvantage. I am worried that the Solicitor-General discussed at length the amendments that he is not actually proposing to move. That will delay the proceedings unnecessarily. In all events, I understand that Amendments Nos. 16 and 18 will not be moved by the Government.

The Solicitor-General: There is no pleasing the hon. Gentleman. I was elaborating on those amendments because they shed light on the amendments I was proposing to move.

Mr. Higgins: The last thing I want to do is introduce an element of acrimony into these proceedings. We debated these matters in Committee—columns 67, 68 and 445 of Hansard—at great length. I do not want to go over it all now. The Government have effectively appreciated our arguments and we are grateful to them.
We are also grateful for the Solicitor-General's comments on whether an administration order should be regarded as an act of bankruptcy—a subject which we also discussed in some considerable detail. I personally had not appreciated the point he made about earlier legislation also requiring amendment. On reflection we think that right. We discussed administration orders at considerable length. We were a little worried that the Solicitor-General had not fully appreciated precisely what they did. However, I think that is now common ground between us.
I am grateful to the hon. and learned Gentleman for all that he has said and I hope that the House will agree to the new clause, subject to any technical points that my hon. and learned Friend the Member for Southport may wish to make.

Mr. Ian Percival: I have no technical points to raise. I rise only to say that I am pleased and that I look forward to being further pleased as the evening wears on. Only a small point is being dealt with in Subsection (2) particularly. I am glad to have the chance to acknowledge that it is good and that the Government have recognised that even small things like this provision, where the wording is wrong, are worth putting right.
Anyone reading the words "administration of estate" would have thought they meant exactly that. But, in fact, they did not mean that. They were not introduced for any evil reasons. It was just that no one stopped to think that they might mislead. It is good that the Government have recognised the argument and have taken steps to put it right.
I acknowledge and recognise that the Government have done exactly what the Solicitor-General has said in respect of the new clause. Having accepted the arguments in relation to the provisions in the Bill, the Government asked themselves whether there was an other statutory provision to which that same argument applied. They have come forward with New Clause 2. It is an excellent way of dealing with the business of the House and I hope that it is a precedent that the Government will follow frequently.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

FEES CHARGED FOR WINDING-UP COMPANIES

'Section 365(3) of the Companies Act 1948 shall be amended by the addition of the end of subsection (3) of the words—
Any scale of fees set out in a statutory instrument submitted to Parliament shall ensure that the fees charged reflect costs so that, taking one year with another, there is no cross subsidisation between firms where the amount brought to credit is less than £100,000, less than £1,000,000 and more than 1,000,000."'.—[Mr. Higgins.]

Brought up, and read the First time.

Mr. Higgins: I beg to move, That the clause be read a Second time.
On the face of it, the new clause is of a general kind, but, as the Under-Secretary will be aware, it relates to a point


which arose on 30th October 1975 in respect of a highly emotional issue, namely, the Nation Life Insurance Company collapse. At that time I expressed concern at the extent of the fees which the Government were charging in relation to the winding up of that insurance company. That was a matter of general concern because it became apparent in the liquidation that the amount which the policyholders received might be significantly reduced by the fees which the Government were charging at that time. At various stages there was some dispute in the courts about the actual figures involved. The Department of Trade originally said £282,000 but this was later increased to £350,000.

Mr. Clinton Davis: That was an estimate, as the hon. Gentleman knows. A new order came to light on 1st October of that year.

Mr. Higgins: I understand that point. But there was some confusion about whether the figure was £282,000 or £350,000. It was a significant difference reflecting a change in the rules that this House has agreed under a Statutory Instrument. At all events, I think that the point of principle was clear—that whereas previously the Government had carried out this service for free, they were proposing in future to do so as a percentage of the money invested. That is the crux of the provision in this new clause, which seeks to amend the existing legislation and in effect to overrule the existing Statutory Instruments. The point at issue is whether the basis for computing the Department's charges is satisfactory. We all appreciate that the charge in the Nation Life case was substantial.
No one on the Opposition side, anxious as we are to confine public expenditure and to ensure that any costs of Government service are charged out, would disagree that the arrangements we make should cover those costs. But there is a problem over the burden of the different categories of firm or person going into liquidation. What worried me at the time and still worries me to some extent is that the balance is not right.
We are all agreed that the total costs that the Department levied should reflect its total costs, but it seems that the Statutory Instrument which so far we

have approved and which the new clause would override means that for the medium-sized firm the burden of the Government audit fees and other charges in connection with the winding-up is probably about right. In the case of a small firm, that is perhaps more doubtful. There are obviously no economies of scale involved and perhaps the fees should be adjusted to allow for that.
It is at the upper end of the scale that we are particularly concerned, because the assets of an insurance company which goes into liquidation are likely to be very large. Consequently, on the present basis of charging, the Government audit fee and the other charges levied are also likely to be extremely high. I doubt whether that charge and the present basis of charging are equitable, in the sense that the people concerned are charged the true cost. If the new clause is accepted we should reach a more equitable basis.
I do not think that this matter was adequately considered by the House in advance of the Nation Life affair. It is typically the kind of thing which goes through in a Statutory Instrument, probably on the nod and without adequate debate. So this is simply a probing clause designed to suggest that the present basis of charging in winding up, which is one of the matters covered by the Bill, needs to be reviewed.
I hope that, in the general spirit of co-operation that we have now engendered, the Minister will be able to be forthcoming, to say that he has reviewed the matter and will consider accepting the new clause or tabling a new Statutory Instrument to put the matter right. It is certainly difficult to believe that in the case I have mentioned the cost of the audit was as much as £350,000, but no doubt the Minister can elaborate on that.
That is the yardstick by which we should judge the present situation, whether the amount levied—no doubt the Minister will say whether the estimate was £350,000 and whether it has changed since—reflected the charges and costs incurred in carrying out the audit. If it is that high, we should seriously consider the scope for economies in the Department in this respect at a time when public expenditure is very important.
What gave rise to the new clause was a particularly emotional case, but I hope that the Minister can give some more general reply. It is worth raising the subject on Report rather than in Committee, because at the time it raised strong feelings among many hon. Members with constituents who had been badly hit by the Nation Life collapse and who felt that the burden which they were being asked to pay to the Department was unduly and unfairly heavy.

Mr. Clinton Davis: There can be no doubt that the issue which gives rise to this debate was emotive. We are not debating today the merits of the Nation Life situation but rather how the Government compute their fees under the fees order. I gather that the hon. Member for Worthing (Mr. Higgins) is probing here with a suggestion that we should aim to fix the fees on the basis that in certain groups of compulsory liquidations the overall amount chargeable would be related to the actual cost of the work involved. I do not think that he would seriously contend that the new clause represents the last word on the matter, but he is perfectly entitled to probe on a matter of this importance.
I shall deal first with the basis on which we approach these matters—a basis which commended itself to the House because the Companies (Department of Trade) (Fees) Order 1975, which came into operation on 1st October that year, did so with the concurrence of the House. That order authorises the fees and percentages to be charged in respect of the various proceedings for the compulsory winding-up of companies. These include fees and percentages chargeable by, first, the official receiver when he acts as liquidator in respect of some of his duties—for example, he has to realise assets, to distribute funds to creditors and so on—and, second, by the Department, which has to audit accounts, invest funds and so on.
But there are other duties which both the official receiver and the Department perform in connection with the winding up of companies for which no fee is prescribed in the order. I should not complain if the hon. Member were not aware of this situation, because this is a technical matter and I confess that I was not aware of it myself until I became involved in these matters.
Under this category, in cases of compulsory liquidation, the official receiver has a statutory duty to investigate the reasons for failure and any criminal offence and the Department has functions to perform in relation to the conduct of compulsory liquidations. It has to make banking arrangements, keep accounts, undertake the audit, deal with the investment of funds and pay out moneys from the liquidation account. The conduct of liquidators may have to be investigated where complaints are made. It has to deal generally with complaints by creditors and others arising out of compulsory liquidations. So the fees chargeable under the order are not intended to cover all the costs of the Insolvency Service. However, these costs are expected to be recovered, as far as possible, from fees and income accruing from the investment of estate funds in both bankruptcies and companies winding up.

5.0 p.m.

The work of the Insolvency Service has to be undertaken for the benefit of the country as a whole, because it must represent the interests of the creditors. Therefore, it cannot be paid for merely by charging any particular estate for the actual work done in that connection. It is clear that in many estates the assets are inadequate to cover the cost of the work done. The service would therefore be incurring a permanent financial deficit. It is necessary to fix the fees at a level sufficient to produce an overall income which, together with the income from investments, will as far as possible meet the overall costs of the service.

Despite this policy, in the financial year ended 31st March 1975 the service was able to recover only about 80 per cent. of its costs. There is a practical limitation, which I fully recognise, on the extent to which fees can be increased without diminishing returns. Creditors are already discouraged by the amount taken by preferential creditors, and they will not consider it worth their while to petition if the remaining corpus of assets is further mulcted by costs and fees. There has to be a point beyond which one cannot go on doing that sort of thing.

The clause would have a curious effect. It would increase the amounts chargeable to estates by official receivers and the


Department, because the cost of the work done in most cases exceeds the fee charged. However, I concede that it would result in lower charges where large amounts are brought to credit—for example, Nation Life. There is already power under the fees order for the Treasury to sanction a reduction of the fees in such cases where the Secretary of State for Trade considers that they may be excessive. But if the actual costs charged to the estates under the clause were first subsidised by the income from investments, the service would operate at a loss, because it would be able to recover its costs only in cases where there were sufficient assets. The cost of the work done in other cases would fall to be dealt with out of public expenditure. I do not think that the hon. Gentleman, on reflection, would consider that to be a proper result.

Another effect of the clause would be to increase the cost of the Insolvency Service, because detailed accounts would have to be provided in relation to work done in each case so that the cost could be calculated. That is not done at present, and it was not done under a Conservative Government.

I come now to the question of Nation Life and the actual fees charged to date. First, in the category where the Department of Trade charges arise, the audit fee was £60,260. In the second category, which relates to certain statutory duties which the Official Receiver performs, the statutory stationery fee charged under the fees order amounted to £18,127; the realisation fee was £16,701; and the ad valorem fee, by far the largest proportion, was £205,595. The total statutory fees to date have amounted to £300,683. The total realisations in the accounts so far audited amount to £14,099,752. There is likely to be further realisation of assets and there will be further audit and ad valorem fees chargeable. I cannot foresee what they are likely to be, because they depend on what occurs.

Mr. Higgins: I have the greatest difficulty in reconciling any of the figures the hon. Gentleman has just given with the ones he gave in the debate on Nation

Life on the date to which I referred. I understood then that the legal costs were £500,000, that the liquidator's and special manager's costs were expected to be £700,000, and that the Department's audit fee was £282,000. These seem to be totally different orders of magnitude, let alone totally different figures. Can the Minister reconcile them? I know that it is a complex matter, but it is one of some concern.

Mr. Davis: I am not dealing with the legal fees or with the liquidator's fees. They are separate matters and are not encompassed in what the hon. Gentleman has raised today. I am dealing with the statutory fees. What I was seeking to say in that debate—I was corrected on the matter—was that it was expected earlier that the statutory fee would be about £282,000. Then there was an increase from 1st October 1975, and it was then estimated that the fee would be of the order of £350,000. The figure I have just recounted is the actual fee up to the present of £300,683. I hope that that puts the matter right for the hon. Gentleman.
The work carried out by the Insolvency Service in this case can also be conveniently divided between that done by the official receiver and that done by the Insolvency Service headquarters. The official receiver was appointed provisional liquidator of the company by order of the court on 3rd July 1974. He was directed to take possession of and to protect the assets of the company, and in performing that function he took over the control of the company previously exercised by the board of directors. He subsequently applied to the court for, and was granted, leave to continue the company's business for limited purposes.
On 29th July 1974 the court ordered the company to be wound up, and the official receiver thereupon became provisional liquidator pending the appointment of a liquidator—that is, in the usual sense and not merely for the primary purpose of acting as receiver prior to liquidation. In his new capacity as provisional liquidator he negotiated arrangements with the clearing banks for them to continue operating the direct debit system for collecting policyholder's premiums. In this connection he entered personally into guarantee arrangements


with the clearing banks. He was involved in making numerous reports, applications and attendances before the court in connection with the continuance of the company's business. He made arrangements for a statement of affairs to be lodged and summoned meetings of creditors and contributories. This involved the issue of some 40,000 notices and forms of proof of debt. The official receiver chaired these meetings and reported the results to the court, following which Mr. G. A. Weiss, of Cork Gully, was appointed liquidator.
Subsequent to the meetings the official receiver sent to each creditor and shareholder of the company a summary of the statement of affairs, together with his observations thereon. To obtain the information for the meetings and his observations the official receiver interrogated the officers of the company, and he is still engaged in carrying out a full investigation of the company's affairs.
The Department of Trade, since the first appointment of the official receiver as provisional liquidator, has acted as banker for both the official receiver and the subsequent liquidator, and in this capacity has arranged for the investment of funds as they became available within the ambit of court orders. Subsequently the Department arranged for the realisation of these investments and prepared payable orders to enable distribution to be made to the creditors.
Two dividends have been paid so far—the first for 41·5p, which I was able to report to the House on the occasion to which the hon. Gentleman referred, and the second for 11p. I gather that a third dividend is expected to be paid shortly. I am not sure what will be the amount of that dividend.
The Department has further assisted the court in arriving at decisions on the interest to be attributable to the various funds and in resolving the conflicts between the various groups of policy holders. The House will recall that the Department appeared as amicus curiae in the proceedings, on the liquidator's application, to determine the rights of policyholders regarding liquidators generally.
In addition, the Department has given advice and help to the liquidator, particularly in connection with his application

for special bank accounts, his control of the Committee of Inspection and the expenses incurred by that body, and in connection with bank fees. At present the Department is also required by law to carry out a detailed audit upon submission of accounts from the liquidator. These are due every six months, and the audit thereof is a major operation. Bi-annual audits will continue until the liquidator is released.

Mr. Tim Renton: The Minister said that the third dividend would be paid shortly. Will that be the last dividend? I did not understand whether it was the third and final dividend or whether there would be a further dividend thereafter.

Mr. Davis: I did not say that it would be the final dividend. Dividends depend on the realisation of assets. The liquidator has determined that it is appropriate shortly to pay a further dividend. What further dividends will follow will be dependent upon what he is able to realise.
I hope that I have been able to demonstrate to the hon. Member for Worthing and the House that what has occurred in relation to Nation Life has fully complied with the statutory requirements. The basis which the hon. Gentleman proposed for the Insolvency Service could lead to a substantial financial imposition borne by the taxpayers which I would not expect him, on reflection, to embrace as a policy. This debate has given me a useful opportunity to recount what has happened about Nation Life, and to that extent I am grateful to the hon. Gentleman.

Mr. Higgins: I am grateful to the Under-Secretary of State for bringing us up to date in what is in many ways a tragic story. I am also grateful to him for distinguishing between the legal costs, manager's expenses and so on and the costs of the Department. We have had no clear indication whether the Department's fee of £368,300—

Mr. Clinton Davies: Let us get it right. The hon. Gentleman has added another £68,000, which is a substantial addition. The figure is £300,683.

Mr. Higgins: I have now understood what the hon. Gentleman said. We are not clear to what extent that figure reflects the costs of the operation. We tabled the clause because under the arrangements


which the Under-Secretary of State supports there is a degree of cross-subsidisation between liquidations of different sizes. I understand that in many cases there are no assets and the cost falls on the Insolvency Service. On the other hand, firms with large assets make big payments and there is, therefore, an element of cross-subsidisation.
We are worried about whether that is the right principle. We are anxious that the service should be self-financing, but we need a scale which as far as possible avoids cross-subsidisation.
I should like to consider what the Under-Secretary of State said about who is appropriately charged to cover any deficit in the service. It is a little curious that the people who are charged for the services provided by the Insolvency Service for those who have no assets should be the people who are themselves in liquidation but who happen to have some assets. It is nice to be able to balance out the accounts and say that the Insolvency Service pays for itself. There is a lot to be said for that, but it is a little curious that the people who pay should be those who are also in liquidation.

Mr. Clinton Davis: Is the hon. Gentleman saying that the Insolvency Service should get even more into the red than it is at present? That is what would happen if his argument were pursued.

5.15 p.m.

Mr. Higgins: That is not what I am saying. We should like to know the degree of cross-subsidisation to enable us to form a judgment. Perhaps I shall table a Question later. That will give the hon. Gentleman—whose briefing on this subject on earlier occasions has not been as perfect as it might be—an opportunity to go into the matter. I am grateful to the Minister for bringing us up to date. I shall try through a Question to get exact information, because there are limits within which one would wish to operate. There may be cases which involve payments by individuals who may be every bit as hard up as other individuals.
In view of what the Under-Secretary of State said in his helpful reply, I do not wish to press the clause which, as he has said, is a peg on which to hang the argument rather than a clause we wish

to see embodied in the Bill. I therefore beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

INCREASE OF MONETARY LIMITS RELATING TO BANKRUPTCY AND WINDING UP

Mr. Clinton Davis: I beg to move Amendment No. 1, in page 1, line 10, at end insert—
(2) The Secretary of State may by regulations increase or reduce any of the sums for the time being specified in the provisions amended by subsection (1) above.".

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 2, 3, 32, 33, 34, 35, 36, 37, 38, 39, 40 and 41.

Mr. Davis: The amendments have the effect of empowering the Secretary of State by regulation to vary—that is to say, increase, further increase, reduce or further reduce—the monetary limits specified in Part I of Schedule 1 and of subjecting the draft of any such regulations to approval by resolution of each House of Parliament.
Those who served on the Committee will recall that Clause 1(2) of the original Bill was struck out. That amendment imposed upon the Government the extraordinary burden of having to come to the House with a Bill every time they wanted to achieve what is set out here. That is wholly unacceptable and completely inconsistent with the Opposition's attitude of urging us to adopt a flexibility of mind. Flexibility would have been impossible to achieve if the amendment had been allowed to stand.
The original proposal related only to the increase or further increase of monetary limits, and I indicated that I thought it appropriate that we should have the right to vary both in relation to increases and reductions. That is what we seek to achieve by the amendment. I think the House will agree that the alternative carried by the Committee through fortuitous circumstances is untenable. Having regard to the importance of the regulations, we feel it right that they should be subjected to the affirmative rather than the negative resolution procedure which we originally prescribed.
The purpose of Amendment No. 32 is to provide that no reduction in the following monetary limits shall affect any cases in which the proceedings were begun before the coming into force of the reduction: the maximum value of the debtor's assets for summary sequestration in Scotland; the maximum amount for the jurisdiction of the county court, in a case of bankruptcy, to adjudicate upon any claim not arising out of the bankruptcy; the maximum value of the debtor's estate for summary administration in bankruptcy; the maximum share capital for winding up jurisdiction of a county court in England and Wales or a sheriff court in Scotland.
The amendment will also have the effect of ensuring that any increase or reduction in the maximum value of a bankrupt's necessary goods which are exempt from division among the creditors will not affect any case in which the receiving order occurred before the coming into force of the increase for reduction.
The last group of amendments merely sets out after "increase" the words "or reduction". This will have the effect of applying the transitional provisions in paragraphs 2, 3 and 4 of Part II relating to preferential wages and paragraph 5 relating to the amount of the judgment debt above which the sheriff is required to retain the proceeds of execution for 14 days, to any reduction as well as to any increase in the monetary limits.
The fourth amendment will have the effect of applying the transitional provisions in paragraph 3 to any increase or reduction in the maximum salary payable to a curate where a benefice is sequestrated under Section 50(3) of the Bankruptcy Act 1914.

Mr. Higgins: This is a splendid British compromise. Originally the Under-Secretary wanted to make these changes by negative resolution. We succeeded in carrying an amendment that ensured that he had to do so by means of a Bill. The hon. Gentleman is now proposing that the affirmative procedure be adopted. On the whole, that is not a bad compromise. It is the sort of compromise that all Oppositions seek to achieve, and we have achieved it. I see no reason to complain.
In addition, the hon. Gentleman has eliminated any possibility of restrospection. I do not think that we can ask for any more. We are grateful to him for the amendments and I am happy to go along with them.

Amendment agreed to.

Amendments made: No. 2, in page 1, line 12, after 'increase', insert 'or reduction'.

No. 3, in page 1, line 15, leave out from 'and' to end of line 17 and insert:
'no such regulations shall be made unless a draft of them has been approved by resolution of each House of Parliament.'.—[Mr. Clinton Davis.]

Clause 6

POWER TO DISPENSE WITH PUBLIC EXAMINATION OF DEBTORS

Mr. Clinton Davis: I beg to move Amendment No. 4, in page 4, line 26, leave out from 'particular' to end of line 30 and insert—

'(a) whether the debtor has made a full disclosure of his affairs;
(b) whether he has been adjudged bankrupt on a previous occasion;
(c) the number and nature of his debts;
(d) whether his bankruptcy would for any reason be a matter of public concern; and
(e) such other matters as may be prescribed for the purposes of this subsection by rules made under section 132 of the said Act of 1914.'.
The effect of the amendment is to provide specifically for any additional criteria, if needed, by which the court will determine whether to make an order dispensing with the public examination to be prescribed by the rules. The format of the provision has also been altered to make reference easier. That alteration has been made following the point made by the hon. Member for Worthing (Mr. Higgins). We have come to an accommodation and I think that we have succeeded in making reference easier.

Mr. Higgins: The format is a great deal better. We now have the advantage of paragraph (e), but other than that I think that all the provisions are the same. I am not clear what the hon. Gentleman feels might conceivably be covered by the paragraph. Perhaps he will give us some indication. However, I do not wish to dissent from the views he has put forward.

Mr. Clinton Davis: It was to provide a residual discretion in the court after it was thought that the other matters were not sufficiently full. I think that they were sufficient but this puts the matter beyond reasonable doubt.

Mr. Leslie Spriggs (St. Helens): I rise briefly to ask my hon. Friend to explain the full meaning of paragraph (a), which states:
whether the debtor has made a full disclosure of his affairs".
Does that include the directors' fees in a firm where the receiver has been brought in?
My hon. Friend may be aware of a firm in my constituency where the directors had been helping themselves to the till. They paid themselves fees well in excess of what were thought to be reasonable by the creditors. It was thought that those directors had to a certain degree created a financial situation in their own firm—it was a family firm—whereby the business had to be passed to the official receiver for his attention.
Paragraph (b) states:
whether he has been adjudged bankrupt on a previous occasion".
These cases come to the attention of a number of people who watch the Press very carefully. However, there must be millions of people who do not observe the notices of bankruptcy or of bankruptcy proceedings. To my knowledge there are many decent business men and business women who operate on a small scale, selling their services to other firms and paying wages and salaries, income tax and other matters on behalf of their staff. They then find that a firm with which they have been dealing has gone into liquidation. What worries them is that a member of the firm or family may open up in business under another name to carry on what appears to be the same business that has gone into liquidation.
Will my hon. Friend explain how we can rid ourselves of what I call business pirates? Clearly they are pirating. They are doing something that is detestable. They know that they are trading at the expense of honest business men who are paying their way. At the end of the day there appears to be no protection against the vandals who lurch from one business

to another, robbing other business men time after time. Sometimes the robbery takes place in their own names and on other occasions in the names of other people or other members of the family.
Surely the House and the country are entitled to know what the Government are prepared to do by way of legislation to protect the good business interests. These questions need answering and I hope that my hon. Friend will be able to give some indication of what is intended in this part of the Bill.

Mr. Ian Percival: Perhaps the Minister will be good enough to say a little more about paragraph (e). I appreciate that generally speaking there is an advantage in retaining some sort of elasticity, but this is a bit more than that.
In Committee we discussed the desirability of having the criteria set out by Parliament in the statute, and that is what was done. The first part of the amendment is putting into tabular form the criteria laid down by Parliament. However, paragraph (e) is introducing something quite different. This is not some flexibility which can be exercised by Statutory Instrument laid by the Minister and either negatived or made subject to the affirmative procedure. In fact, the paragraph is providing for an extra parliamentary alteration of the criteria.
Has the hon. Gentleman a specific matter in mind that he hopes will be dealt with fairly soon? Is it for that reason that he thought some elastic and simple procedure such as this should be introduced? We are not against the provision, but we are a little concerned because it appears to be a rather different way of introducing elasticity from that which is usually employed.

5.30 p.m.

Mr. Clinton Davis: I shall try to deal briefly with the point raised by my hon. Friend the Member for St. Helens (Mr. Spriggs). If he examines the clause he will see that we are dealing with the power to dispense with public examinations and the duty imposed on the court in that respect. Therefore, the point he raised is not wholly germane.
My hon. Friend said that we should seek to rid ourselves of pirates in business.


I agree with that concept, and I ask him to reflect on Clause 9 relating to the disqualification of directors. He should also reflect on a provision which we inserted in the Companies (No. 2) Bill only last week providing for a register of disqualified directors. All these matters go some way, imperfectly though it may be, towards the achievement of a noble aim which I hope the House will find unexceptionable.
The hon. and learned Member for Southport (Mr. Percival) invited me to give reasons why we thought it right to import paragraph (e). We thought it right that the criteria to which courts should have regard when deciding whether to dispense with public examination should be introduced into the Bill rather than that they should simply be laid down in the bankruptcy rules. The hon. and learned Gentleman dealt with that point in Committee.
We have to reflect on the rôle of the official receiver and on when he should make an application for an order to dispense. We take the view that he should be under a duty to apply for an order to dispense where he considers that these criteria are met in a particular case. Therefore, we intend to seek amendment to the rules to that effect and to provide for a report to be submitted by the official receiver in support of his application drawing attention to relevant matters and to any objection to the order to dispense about which a creditor might notify him. That again was a point raised in Committee.
The application would be made ex parte by the official receiver, but only by him. I do not need to rehearse this matter further because we debated whether the right of application should be made by people other than official receivers. It was the Government's view that it would not be right for that to be done.
It is not intended to provide in the rules for notice of the application to be given to creditors or debtors. Amendments to the rules will be sought to provide for a copy of the order dispensing with the public examination to be served on the debtor and notice of the order given to creditors not less than seven days before the date fixed for examination.
In bankruptcy the permutation of circumstances which a court may be asked to

consider in determining whether to dispense with a public examination is very difficult to forecast. We have tried to set out certain criteria, but there may be additional ones. It would not be appropriate now to try to identify more closely the circumstances in which to act or not to act in a particular context. Therefore, this amendment provides some degree of flexibility, and I regard it as the right way in which to proceed.

Amendment agreed to.

Clause 7

AUTOMATIC DISCHARGE OF BANKRUPT

Mr. Clinton Davis: I beg to move Amendment No. 5, in page 5, line 19, leave out 'absolutely'.

Mr. Deputy Speaker: With this Amendment we may also take Government Amendments Nos. 6 and 7.

Mr. Davis: This is a somewhat complex matter. Although I shall try to summarise it, I may not accomplish the purpose very well, and then I shall have to go into the matter in greater depth.
Under Clause 7 a person will be granted an automatic discharge on a particular date, usually five years after adjudication, in the circumstances prescribed in the clause if he has not already been discharged under Section 26 of the Bankruptcy Act 1914. The purpose of these amendments is to explain what is meant by the word "discharged", which appears in subsections (2)(a) and (4)(a).
The amendments will have the effect of making it plain, taking account of the fact that various kinds of qualified orders of discharge may be made on a Section 26 application, when a person is to be regarded as undischarged at the relevant date so that the automatic discharge provision will take effect. In the meantime the bankrupt may make an ordinary application under Section 26 for an order to enable him to accelerate the discharge date. If an application is made and the court had granted a discharge by virtue of the fact that any period of suspension has expired, the automatic discharge provisions will not operate because that has become unnecessary.
I hope that with that limited amount of verbiage the House will accept the amendments with acclamation.

Mr. Higgins: I shall read with interest in tomorrow's Official Report the Minister's explanation of the amendments. My impression from listening to it was that it made good sense, which in itself is a triumph.
We debated these matters in Standing Committee on 8th June and the arguments are set out in ccs. 317 to 320. However, there is still one point about which I am uncertain. As I understand the situation, there will be an automatic review after five years and, if that goes through, the person concerned will be discharged. I think I am right in saying that if the individual concerned applies for a discharge before then and is unsuccessful, the automatic review does not happen at the end of the five years.
I do not think that that was what we intended, and it certainly seems an odd result. Obviously it will be a deterrent against a person applying for discharge before the end of five years. Therefore, there will be more undischarged bankrupts hanging around than is necessary. Will the Minister confirm whether the wording is such that if a person applied for a discharge within five years, he would effectively be subject to an automatic review at the end of that period?

Mr. Clinton Davis: If the man is successful, it does not matter. If he is unsuccessful, the automatic discharge will not take effect. He must therefore carefully consider what he wants to do. We shall be dealing with this matter in subsequent provisions.

Mr. Higgins: Do we really want to create a situation in which someone is deterred from applying for a discharge and gives up the right of automatic review at the end of the period? As the Minister says, if that person is successful, it does not matter, but if he is unsuccessful, do we want to force him to apply again at the end of the period when there are certain consequences which, from his point of view, are undesirable? If someone feels that he is able to apply and that he will be successful, he should be able to apply without incurring this penalty. Perhaps the Minister will consider this matter between now and the return of this Bill from the other place?

Mr. Clinton Davis: He is seeking to pre-empt the automatic discharge, and the

court will have to consider certain circumstances in relation to that application which would have some impact in the determination of automatic discharge. In these circumstances, if he gets an adverse result the debtor has brought it upon his own head.
It is a question of balance. We have given it a lot of thought between Committee and Report. I do not believe that one can reach an ideal solution here. It is always a question of balance and we believe that the right balance has been struck.

Amendment agreed to.

Amendments made: Nos. 6, in page 5, line 35 leave out 'absolutely'.

No. 7, in page 5, line 44 at end insert'—
(5) In subsections (2)(a) and (4)(a) above references to discharge are references to discharge by an absolute order of discharge or by the expiration of the period, or satisfaction of any requirement, specified by a suspended or conditional order.'.—[Mr. Clinton Davis.]

Clause 9

DISQUALIFICATION OF DIRECTORS OF INSOLVENT COMPANIES

Mr. Clinton Davis: I beg to move Amendment No. 8, in page 7, leave out lines 24 to 29 and insert—
'(i) is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or subsequently) and was insolvent at that time; and
(ii) is or has been a director of another such company which has gone into liquidation within five years of the date on which the first-mentioned company went into liquidation; and'.

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 10, 11 and 13.

5.45 p.m.

Mr. Davis: The purpose of these amendments is to clarify the original intention of the clause in certain respects, namely, for the conditions of Clause 9(1)(a) to be met. First, the person concerned must be or have at some time been a director of at least two companies. Secondly, the companies must have gone into liquidation within five years of each other as a result of either a winding-up order made by the


court or of a resolution for voluntary winding up. Thirdly, the companies must be insolvent at the date of the order for winding up or of the resolution for voluntary winding up.
This clause was very difficult, but the whole Committee agreed when we debated the matter that it was wholly desirable. However, a number of points made in the course of those debates gave rise to the need for clarification of our intentions. Therefore, it is incumbent upon me, because it is one of the most important provisions of the Bill, to deal with these matters more fully than I have dealt with previous amendments.
The persons coming within the provisions of Clause (9)(1)(a) include not only directors of the relevant company at the time or shortly before it goes into liquidation, but those who have been directors at any time, perhaps many years previously. It must be stressed, however, that a disqualification order may be made against a director or a former director only if his conduct as a director of any company referred to in subsection (1)(a) has been such as to make him unfit to be concerned in the management of a company. If the director's conduct did not contribute to the failure of the relevant company it is likely to be because that director had resigned many years before the company went into liquidation. Thus, he cannot be made a subject of a disqualification order.
Relevant companies must be at least two in number and the winding-up order or the resolution for voluntary winding-up in respect of one company must fall within five years of the winding-up order or voluntary winding-up resolution in respect of the other. Amendment No. 14 provides that at least one of these companies must have gone into liquidation after the dates of the coming into force of the provision.
It has been suggested by professional bodies advising us that by using the date of the winding-up order for this purpose we are making substantive rights or disability dependent on a vagary, such as the state of court lists or the exigencies of litigation. The petition to wind up a company may be set down within five years of the failure of another company, but, because of the congestion in court lists, the winding-up order may be delayed and fall outside the five-year period. This

would allow the director to escape the consequences of the clause.
The alternative was to use the commencement of the winding up, as defined in Section 229 of the Companies Act 1948, instead of the date of the order, but this solution was no less arbitrary and would create more problems than it would solve. It might he thought that the clause referred only to persons who had been directors prior to that date. In any event, it cannot operate until the second company goes into liquidation, for example, until a Winding-up Order is made by the court. Therefore, it seems more logical to use that event as the criterion.
We have had correspondence on this matter and have considered it very carefully. We have come to the view that the balance we have struck, while not perfect, is about right. It is not likely to be more than a marginal problem in any event, and it is the most logical of the solutions available.
It is not a requirement of the Clause that a relevant company must be insolvent when the person concerned was a director. It is only necessary for it to be insolvent when it goes into liquidation. This provision has been made because it is intended that the clause should catch a person who, although his conduct as a director has driven the company to the point of insolvency, has resigned before the company actually became insolvent. For this reason we consider it necessary for the clause to require that a company be insolvent at the date of winding up. I hope this will satisfy my hon. Friend the Member for St. Helens (Mr. Spriggs).

Mr. Spriggs: I am grateful for my hon. Friend's comments and his guidance. Would it not be in line with proper justice if people who forced their own companies into liquidation were treated as criminals? Should they not be treated as people who are creating unnecessary unemployment by their adventures in the industrial world and dealt with in the courts as such?

Mr. Davis: If their action were in fact criminal, as frequently happens, prosecutions would follow. But the mere fact that insolvency has occurred through the negligence of an individual should not necessarily justify the institution of criminal proceedings. One must look at each case on its merits.
Amendment No. 10 is to make clear the original intention that an application for a disqualification order against the director of a company under subparagraph (i) and (ii) of subsection (1)(a) which is being wound up by the court has to be made by the official receiver, or in Scotland by the Secretary of State. The court which made the winding-up order has power to make the disqualification order on such an application. But the main burden of the argument relies on Amendments Nos. 8, 11 and 13.

Mr. Tim Renton: I have considerable misgivings over the wording that the Under-Secretary wishes to insert. As he rightly said, this is one of the most important clauses. I am sure that there is a strong wish on both sides of the House not only that directors should be held responsible to employees, shareholders and other interests in the company, but that they should be fully aware of their responsibilities.
However, it is most important to get the balance right. If too great a burden is placed on the director by way of the penalties to which he may be liable in future years, there is the danger, particularly with non-executive directors, that they will refuse invitations to join boards of companies simply because they see the potential perils and traps as being too great, and certainly not commensurate with the reward they might receive for their directorships.
I do not say that in an attempt to protect directors regardless of all else. I wish only to stress that the balance must be right if the right people are still to be tempted to lead companies to growth.

Mr. Spriggs: Surely with his experience the hon. Member must be aware that any director who has a difficulty in understanding his responsibilities to the company can refer to the company secretary. The company secretary's information is always available to every director in the company from the chairman down.

Mr. Renton: Perhaps the hon. Member has misunderstood me. I was not talking about a director not being able to understand his responsibilities or of not having them made fully clear to him by the company secretary. I was referring to the potential dangers and pitfalls for

the director who regards them as so great that he will decline an invitation to join a board.
Under the amendments as proposed by the Under-Secretary the potential penalty applies to someone who is or has been a director of a company which has at any time gone into liquidation whether while he was a director or subsequently. The position therefore arises that someone could have been a director of a company in his youth. He could have left the company and four years and 11 months later the company could go into liquidation for no reason connected with the director's performance on its board. I take the Under-Secretary's point that it is still up to the courts to decide that his conduct was inappropriate and did not lead to good management of the company.
The director, through inexperience or misjudgment, might have encouraged the company to engage in or might have been a party to poor commercial decisions. These decisions, however, might have had nothing to do with the subsequent insolvency of the company.
I am trying to paint a picture in which people are encouraged to go into companies and on to boards and to take risks that encourage companies to grow. The director might have taken one or two wrong commercial decisions which the company could survive. His conduct could be regarded as poor and prejudicial to his reputation. Because of a subsequent liquidation that has nothing to do with his conduct, a black mark is entered against him. If another company of which he is a director goes insolvent within five years, he risks this heavy penalty of being prohibited from concerning himself with or taking part in the management of a company for another five years.
By inserting the words "or subsequently" the Under-Secretary may have gone too far and may have erred into causing people to decline invitations to join boards as non-executive directors because of the fear of what might happen to the company four or five years after they have left those boards.
As I read the amendment, it would be possible for the court to judge that directors ought not to be involved any further in the management of a company


on the basis of companies which went insolvent before the Bill became law. Is there not a retrospective power there? I believe the clause should apply only if both the companies become insolvent after the Bill has become law.
We are debating this Bill at a time when, clue to unhappy economic circumstances, the number of insolvencies is very high. A director could find himself in an alarming position immediately the Bill becomes law, whereby he was a director of a company which went insolvent four years ago and is now a director of a company which looks like going insolvent in the next 12 months. It would be a pity if the Bill were to stifle the initiative of directors and limit their decisions to join boards. I am thinking particularly of non-executive directors.

6.0 p.m.

Mr. Spriggs: I am concerned about whether the amendments will allow people who have indulged in dishonest business methods to creep back into directorships and once again to commit the same kind of behaviour against other firms. I wrote to the Department about St. Helens Auto Electrics, a firm which provides a service to haulage contractors by rewiring whole circuits of vehicles, including ominibuses. For many years the company sold its services to one of the larger haulage contractors. That contractor paid good wages but when the company sent in its account for between £3,000 and £4,000 the contractor did not pay—could not pay. I was told that the directors of the firm had been helping themselves to fat directors' fees at a time when the firm was apparently running down.
The official receiver was brought in and his fees amounted to about £34,000, but my constituent who runs St. Helens Auto Electrics—a good, healthy but small firm—received about £1,000. He lost the rest because someone else took advantage of the situation. Will taking out the suggested words allow people such as the directors of that haulage firm to creep back into the business which they previously conducted or into another similar business?

Mr. Higgins: It is common ground that action should be effectively taken against those who abuse the position of limited liability. That is why the clause

has been supported by both sides. The question is one of structure and the right balance. When the law is changed, a problem could be created for people who have been involved in an insolvency years before. It is possible that the balance is not correct, but the Government are pretty close to the fulcrum.
I am concerned about the argument put by my hon. Friend the Member for Mid-Sussex (Mr. Renton). If a man was a director of a company which goes into liquidation years after he has left that company, he would still notch up one black mark which would count against him in the future. I question whether the period involved should be open ended. I doubt whether a court could decide whether a director was responsible to a greater or lesser extent for an insolvency which took place 25 years before. It is a minor issue but perhaps a time limit should be introduced.

Mr. Clinton Davis: In Committee we all set out to mitigate the difficulties to which hon. Members have constantly referred. It is virtually impossible to deal with the director who is involved in an insolvency for which he is clearly responsible and who then sets up in another business somewhere else and becomes involved in another insolvency. The powers restraining such an individual from embarking on that course of conduct are limited.
My hon. Friend the Member for St. Helens (Mr. Spriggs) is right to express anxiety about the situation. We welcome him to the debate as he was not a member of the Committee. Naturally he is worried about the situation in his constituency but he will forgive me if I do not give him an answer to his specific problem. I recall seeing his letter, but it has not been dealt with yet. I shall look into the situation further and see what relevance it has to the matters that we are debating today.

Mr. Spriggs: I must correct my hon. Friend because the case was dealt with but not completed.

Mr. Davis: My hon. Friend is worried about the situation and he is entitled to ask me to look at it again. I shall do so.
The clause will not have the deterrent effect on the good person who is invited to join a board of directors. I disagree


with the hon. Member for Mid-Sussex (Mr. Renton) about that matter. We are seeking to give—additional to the provisions of Section 188 of the Companies Act which deals with the fraudulent director who may be disqualified by the court—with the director whose conduct under the definition of the clause makes him unfit to be concerned in the management of a company.
The court will determine the action to be taken. Common sense will not permit the court to act if the only complaint about somebody is that he was a director of an insolvent company 25 years ago. The court is bound to take a long gap into account, and that will be a powerful protection. The provision will not operate as a deterrent.
The hon. Member for Worthing (Mr. Higgins) put his finger on the spot when he said that the country demands high qualities of judgment and, more importantly, of integrity, from those engaged in the business of running limited liability companies. It is therefore important that the court should take into account substantial lack of integrity and manifest lack of judgment in determining whether a person should undertake such important duties in future.
The hon. Gentleman asked me whether it was possible for a situation to arise in which both companies went insolvent before the Act came into effect. The answer is "No". There has to be a situation where at least one of the companies went into a state of insolvency after the Act comes into operation.

Mr. Tim Renton: The Minister has told me that one of the companies must go insolvent after the Bill comes into effect. Could he say in what part of the clause that arises?

Mr. Davis: I said in my introductory remarks that I would be proposing Amendment No. 14, which deals with this point. The hon. Member is right to say at this moment that the issue is not dealt with.
The hon. Member for Worthing invited me to say that I should make the provision less open ended. This must be a matter for the courts. Once we begin to embark on that course, we shall get

into difficulties. I hope that he will not insist that we should pursue that line.

Amendment agreed to.

Mr. Clinton Davis: I beg to move Amendment No. 9, in page 7, line 36, after 'period', insert
'beginning with the date of the order and'.
The purpose of this amendment is to remove any doubt concerning the date of the commencement of a disqualification order. The amendment will have the effect of ensuring that the period of disqualification commences on the date of the disqualification order.
At present the clause is worded in the same way as Section 188 of the Companies Act 1948. It was laid down in the case of Regina v Bradley in 1961 that a disqualification order under that section could not start from a date other than the date of the order. The decision in that case may not necessarily apply in the context of a power not depending on a criminal conviction. The amendment will put the matter beyond reasonable doubt.

Amendment agreed to.

Amendments made: No. 10, in page 7, line 38, leave out from '(2)' to 'is' in line 39 and insert
'In the case of a person who is or has been a director of a company which has gone into liquidation as aforesaid and'.

No. 11, in page 8, line 19, leave out 'this section' and insert 'subsection (1) above'.—[Mr. Clinton Davis.]

Mr. Clinton Davis: I beg to move Amendment No. 12, in page 8, line 39, after second 'company', insert '(wherever incorporated)'.
The purpose of this amendment is to clarify the original intention of the clause, namely, that it also applies to foreign companies capable of being wound up in Great Britain, whether or not they are overseas companies within the meaning of Part X of the Companies Act 1948.
The effect of the amendment is to ensure, first, that foreign companies that are insolvent and that are wound up under the provisions of the Companies Act 1948 will count for the purposes of subsection (1)(a)—that is, they will trigger off the clause; secondly, a disqualification order will prohibit the subject of it


from being a director of a foreign company as well as of companies registered in Great Britain. It will, of course, be effective only in so far as such a person acts as a director in Great Britain.

Mr. Higgins: I am not quite clear why this amendment has been introduced at this stage. I do not recall the provision being discussed in Committee. Was there some reason why it was not in the Bill originally? Perhaps the Minister could tell us how it is one winds up a company in this country which is incorporated somewhere else. I was not aware that that could be done.

Mr. Davis: This arises as a result of further consideration of the matter after the Committee stage. I do not recall this being discussed in Committee. I can tell the hon. Gentleman what the position is as I understand it.
A foreign company, whether an overseas company or other foreign company, which has carried on business in Great Britain or has assets here is an unregistered company within the meaning of Section 398 of the 1948 Act and can be wound up as such. Subsection (7) of the clause already provides that such companies are to be included for the purpose of the clause. The amendment removes any possible doubt. We were concerned that there might be some small area of doubt and felt it best to deal with it now rather than allow the situation to drift.

Mr. Higgins: I am grateful to the hon. Gentleman but I am still a little puzzled. What is the situation about the incorporation of a company overseas? Is it regarded as being wound up within that jurisdiction? It seems a complete oddity. I am not clear how it can be done. Or is it that the company is simply wound up in terms of its operations in this country?

Mr. Davis: The hon. Gentleman is right in the second part of what he had to say. We can have no determining effect on what may happen in another jurisdiction.

Amendment agreed to.

Amendment made: No. 13, in page 8, line 44, leave out from 'of' to 'if' in line 45 and insert:
'this section a company goes into liquidation'.—[Mr. Clinton Davis.]

6.15 p.m.

Mr. Clinton Davis: I beg to move Amendment No. 14, in page 9, line 6, at end insert—
'(9) Subsection (1) above does not apply unless at least one of the companies there mentioned has gone into liquidation after the date of the coming into force of this section; and the conduct to which regard may be had under paragraph (b) of that subsection does not include conduct as director of a company that has gone into liquidation before that date.'.
This amendment seeks to specify the extent to which the clause has retrospective effect. This was an issue which gave rise to considerable debate in Committee. The amendment will have the effect of ensuring, with regard to retrospection, first that the clause will operate only in cases where at least one of the relevant companies has had a winding-up order made against it by the court or has passed a resolution for a voluntary winding-up after the date of the coming into force of this clause. The hon. Member for Mid-Sussex (Mr. Renton) is not present at the moment. That deals with the concern which he expressed.
Secondly, the amendment will have the effect of ensuring that a person's conduct as director of a relevant company can be used as a ground for a disqualification order only if the winding-up order against the company—or resolution for winding-up—is made or passed, as the case may be, after the date when the clause comes into force. The conduct may relate to a period prior to the date of the coming into force of the clause.
Perhaps I should spend a moment or two in explaining the situation about the triggering off of this clause. Where one of the relevant companies went into liquidation before the coming into force of the clause, provided that the other relevant company goes into liquidation after the coming into force of the clause, the clause may be triggered off. It is the person's conduct as director of the second company only which can afford the grounds for a disqualification order.
The clause can also be triggered off where both the relevant companies go into liquidation after the clause comes into force and the person's conduct as director of either or both of the companies may then afford the grounds for a disqualification order. The clause will not be triggered off if both or all of the


relevant companies had gone into liquidation—that is, if a winding-up order has been made or a resolution for voluntary winding-up passed—before the coming into force of the clause. That meets the point advanced earlier by the hon. Member for Mid-Sussex.
This limited retrospective effect is an equitable situation to reach because, although a person would not know that his conduct as director of a company—where it occurred before the clause came into force—could lead eventually to his disqualification from being a director, it is nevertheless not unreasonable to assume that he might have known that his conduct was such as to contribute to the company's insolvency. Obviously, the greater the time lapse between his acting as director and the company going into liquidation, the less weight will be attached to the effect of his conduct on the company by the courts. I hope that with this explanation the House will approve the amendment.

Mr. Higgins: The House is always concerned about legislation that is retrospective, although the term "retrospective" means a number of different things. At one time, the Solicitor-General discoursed on the various definitions. It appears, however, that in this case, although we stressed its importance in Committee, the Government have not gone the whole way to meet the points that were made. Is that so? If it is, why do they not feel able to meet the case completely? I understand the position under the amendment to be that someone will be liable to be included on the register of disqualified directors if the court so decides and if at least one of the companies has gone into liquidation after the date when the Bill comes into force. But it will mean that someone who was the director of a company which was insolvent before the Bill came into force will retrospectively have a black mark put against his name.
I am not sure why the Government do not feel able, when we are changing the law as we are, to go all the way and say that the total score shall be after the coming into force of the Bill. This is a matter of balance, and I do not feel that it would be appropriate to divide the House on it. Nevertheless, it is curious that the Government should have been

determined to include an element of retrospection, even though it is admittedly rather less than that contained in the Bill as originally drafted.

Mr. Clinton Davis: It is necessary to have two companies which have gone into a state of insolvency for the position to be triggered off. We felt that it would be wrong, in effect, to postpone the situation which we seek to encompass in this provision, that the public are entitled to a degree of protection which should be afforded as rapidly as possible, and that a director who was a director of the first company that went into a state of insolvency before the Bill came into operation might fairly be taken to have known that his conduct was such as to contribute to the company's insolvency. I do not think that that is an inequitable solution.
In Committee, we were urged to delete the provision altogether in relation to any company which went into insolvency before the commencement of the Act. As the hon. Gentleman has said, it is a matter of balance. As I think he recognises, we considered the matter very carefully in relation to all the debates in Committee, and we concluded that the most equitable way of proceeding for the protection of the public was to adopt this course. I hope that, even if I have not convinced the hon. Gentleman, he will not decide to divide the House on this issue.

Amendment agreed to.

Clause 10

EXTENSION OF POWER TO MAKE ADMINISTRATION ORDER

Mr. Percival: I beg to move Amendment No. 15, in page 9, line 7, leave out Clause 10.
I know already that the amendment is to be accepted by the Government. It is as nice as it is rare to know that a substantial change like this is to be accepted. But even though I know that it is to be accepted, I should say something about the amendment because, as Ministers recognise, we have been pressing for a very long time to get rid of Clause 10 and the battle over it has raged up until very recently. Therefore, I think that I should say a word or two about why we have been so insistent in our requests or demands—call them what one will—to


have it removed. I think at the same time that I can, without straying beyond the rules of order, at least not far, say on this amendment almost everything I want to say on all the amendments put together.
It is important to remember that the law of insolvency is dealing mainly with bankruptcy in the case of firms and individuals and with liquidation on the ground of insolvency in the case of companies. Much of it, if not most of it, is concerned with safeguarding the position of creditors, so that a creditor may not be deprived of his just desserts by a debtor, whether that debtor be an individual, a firm or a limited company. The case mentioned by the hon. Member for St. Helens (Mr. Spriggs) graphically illustrates the need for such protection, if it may also demonstrate the deficiencies of the existing situation. Whether or not it does the latter, it certainly illustrates the former.
It is in that context that the provisions of the Bill have to be considered. Furthermore, they have to be considered against this factor relating to the position of creditors—namely, that it is commonly agreed that the position of creditors has been substantially eroded over recent years. The remedies open to them are considerably less now than they were some time ago. I refer in particular to imprisonment for debt. It was very largely a threat, because the number of people who actually served imprisonment for debt was very small—a minute proportion of those against whom an order was made. That demonstrates that it really was the most effective threat, and it secured for creditors in an enormous number of cases, getting on for 1 million a year, payment of their debts.
That has gone. I shall not argue why it has gone. Also, the availability to creditors of the very effective process of High Court execution has been eroded over the years. Therefore, those professionally engaged with the position of creditors, as well as creditors themselves, have been much concerned about the deteriorating position of creditors in that respect and also worried because there have been other changes in the wind, such as abolishing the register of county court debts, the compulsory transferring of High Court debts from the High Court to the county court for execution, and a number of other moves which have been

suggested from time to time and on which the Solicitor-General may wish to say a word.
In that context, it is not difficult to see why those particularly concerned in this matter felt that bankruptcy was increasingly becoming the one remaining effective remedy for the enforcement of lawful debts. Let us not forget that what we are talking about is debts lawfully owed. We are dealing with the collection of sums which people are owed in law. Therefore, one starts from the assumption that the creditor is entitled to recover sums of money owed to him, and the law is an ass if it provides a judgment stage but no remedy for the enforcement of the judgment.
For that reason, many of those actively concerned were becoming worried that the position of the judgment creditor was being eroded to such an extent as greatly to distort the balance which must be held between all the interests relevant to this matter. They were concerned, when the Bill was presented in its original form, that it would make such inroads into the bankruptcy provisions as to reduce it to a second-class service and, therefore, represent a further serious erosion of the remedies open to creditors. They were worried that a first-class service might be reduced to the status of a second-class service.

6.30 p.m.

It is right that we should pay tribute to everybody engaged in the bankruptcy service—the Department, officials, registrars and so on. It is a first-class service. Those practising in this sphere were concerned that, if the Bill went through in its original form, it would have reduced to a second-class service that which they all regarded as a first-class service.

Where does Clause 10 fit into all this? The Government have recognised from the outset that there was substance in the general proposition that the remedies open to creditors are fewer now than they were some time ago. The general proposition that, if we increase the minimum debt on which to found a bankruptcy petition, we shall thereby reduce the remedies available to some creditors is incontrovertible. Therefore, we have always accepted the general proposition that, by raising the limits and making bankruptcy less available, we should be


further eroding the means available to judgment creditors for enforcing their rights.

Clause 10 was said to be an addition to the law tending to move the balance a little way back by giving to creditors certain new rights which were of some value and, therefore, to some extent it made up for the further erosion of their rights by making bankruptcy less available to them.

There are three reasons why we still feel that Clause 10 should not be in the Bill. First, because of the other changes which have been made, we think that the Bill is very much better now than when it first came before Parliament. It makes fewer inroads into the availability of bankruptcy to creditors than would have been the case if later amendments which are not now to be proposed had been put forward.

Secondly, we have always taken the view that Clause 10 was useless. It would not add anything to the armoury of weapons open to the judgment creditor. I wish that what I now have to say was not right. I wish that the administration order had lived more nearly up to what was expected and hoped of it. Unfortunately, it has not done so. It is very little used voluntarily. We have always taken the view that at best it was a delusion to suggest that the clause added anything of sufficient significance to offset what was being taken away.

The matter does not rest there. We have always felt that there were objectionable features about Clause 10. One objectionable feature—the provision that the ordering of a list of creditors would operate as an act of bankruptcy—would have been removed by one of the proposed Government amendments if the clause had been staying in the Bill.

Another objection to which we have drawn attention was that the remedy had the peculiar feature—I mean peculiar in the literal sense—that it could be invoked by the court of its own motion. That may sound harmless, but we take the view that our purpose should be to provide remedies at law for judgment creditors to pursue their just rights and to give protection to debtors against being unduly harassed, and so on. Having provided the remedies, it should then be left to

the persons concerned to decide which of those remedies they should pursue. The court, of its own motion, should not be able to say "Even if you would rather pursue your judgment debt by execution, by putting in the bailiffs, and even though the debtor is not applying to us for protection in the form of an administration order, we shall order the making of an administration order." That is what could have been done under the clause as it stood without any notice being given to either party.

Another of the amendments which would have been moved by the Government had the clause been staying in the Bill would have had the effect of providing that the court could make the order of its own motion only after giving notice to and the opportunity for both parties to be heard. To that extent the situation would have been improved, but it would still have meant that, after giving both sides the opportunity to be heard, and they having said "No, we do not want that", the court would be entitled to make the order of its own motion. We thought that that was objectionable.

Thirdly, as the Solicitor-General in an intervention said, Clause 10 could have had the effect of depriving a creditor of some of the other remedies open to him. For instance, if an administration order were made, a creditor could not continue with the process of putting in the bailiffs or of instituting bankruptcy proceedings. If, after an administration order had been made, a creditor wanted to continue with bankruptcy proceedings, he would have to apply under Clause 11 as it stands and the court could, if all the conditions were satisfied, substitute a receiving order.

For those reasons, the so-called remedy provided by Clause 10 had the great weakness that it gave the court no power to investigate the debtor's assets, to protect those assets for the benefit of the creditor against fraud by the debtor, or to get them in if they had not been disposed of.

Mr. John Lee: I have been listening with considerable interest and I have followed the hon. and learned Gentleman's reasoning. Instead of deleting the clause, would it not be better to add the armoury of investigative procedures which he has enumerated regarding assets?

Mr. Percival: That is arguable. It was not a practical alternative in this instance. We might have had a proposition from the Government which would have had that effect, but we should have been entering a different area. We would have been making an administration order a sort of mini-bankruptcy order. There would be a great deal to be considered in taking such a step. One might ask why it should be done in that way when there are already bankruptcy provisions; why not allow people to use the existing procedures? It would not have been a practical alternative in this Bill.
It is sometimes overlooked that one of the first purposes of Bankruptcy Acts, which date back to the early seventeenth century, was to protect creditors against fraudulent debtors. There was a Bankruptcy Act as early at 1623, and Chalmers and Haigh said of it:
The examination of the bankrupt's wife was provided for and the penalty prescribed for non-disclosure of his property by the bankrupt was that he was to be set upon the Pillory in some publick place for the space of two hours and to have one of his or her ears nailed to the Pillory and cut off'.
The House will see that I was not exaggerating when I said that the remedies open to a creditor to enforce a judgment have been substantially eroded in the past 350 years.
Added to the provisions protecting a creditor—the investigatory powers and the powers to follow up assets—were those introduced for the protection of the debtor, with means to secure the orderly getting-in of his assets and their distribution.
All these features of bankruptcy are absent from the administration order procedure. There is, therefore, force in my proposition that the procedures which it was intended to introduce in Clause 10 were, if not useless, misleading and would have deprived creditors of some of their remedies.
Some tributes should be paid. The passage of the Bill has been an excellent example of the co-operation which can exist between representatives of the professions and others outside this House who are directly concerned with and, therefore, knowledgeable about these provisions, the Government, the Opposition and officials. Since Second Reading, there has been a full and free exchange

of views with the working party composed of solicitors and barristers. They have made available their views on these matters to the Government and to us and this has been of enormous assistance on this highly technical subject. I wish, on behalf of the Opposition generally and myself in particular, to pay the warmest possible tribute to the working party for its assistance.
I also wish to acknowledge that the Ministers concerned with the Bill have been ready to discuss all these matters with us and to make available officials who have also discussed these points freely. It is all highly satisfactory. This does not always happen during the passage of Bills through the House, so one should make the point and mark it when it does occur.
It is also highly satisfactory that the end product has been that the Government have accepted our arguments almost 100 per cent. There is no major topic in which our arguments have been rejected. The Government have considered them carefully and accepted them in all important respects.

6.45 p.m.

The Solicitor-General: I repeat that it is my intention to advise the House to approve this amendment. I am happy that we have pleased the hon. and learned Member for Southport (Mr. Percival), but I am not sure that we shall please everyone. Everybody knows that Governments have a succession of moods. They are either weak and vacillating, cowardly in the face of pressure, lacking resolution and blown by every wind, or they are obstinate, impervious to reason, undemocratic and arrogant. Every concession to one group disappoints another.
I hope that I shall be forgiven if I spend a moment discussing Clause 10, not in order to indulge any personal whim but for a serious purpose which will become clear. In the face of what the hon. and learned Member for Southport fairly said, I should like to explain why Clause 10 was originally included in the Bill.
I echo some of the hon. and learned Gentleman's sentiments about the erosion of remedies available to creditors. In consequence of that, bankruptcy has played an increasing rôle and it is not unusual for bankruptcy proceedings to


take place when a comparatively small debt is in question rather than when someone is hopelessly insolvent. The rôle of bankruptcy has extended to a debt-collecting function which it did not originally possess.
I am a little concerned that serious bankruptcy proceedings should be used in this way. I take the point of my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) that perhaps we should be looking for other ways rather than this heavy-handed method. This may be a matter to be considered by the review committee.
The fact that creditors often use bankruptcy as part of the armoury of debt-collection weapons must be weighed against the need of the Insolvency Service to reduce its work load in order to confine it within available staff resources. And I add my tribute to that which the hon. and learned Member for Southport paid to the work of the Insolvency Service.
One of the instances of a weapon in the armoury of creditors being eroded was the abolition of imprisonment for debt. The abolition of nailing someone's ear to the pillory had taken place rather earlier.
Imprisonment for debt was abolished by the Administration of Justice Act 1970. The judgment summons on which some of us cut our teeth at the Bar now has little importance for the ordinary civil debtor. I know that this step was not taken with everyone's approval. The whole problem with enforcement of judgments is to achieve a fair balance between the debtor and the creditor. The abolition of imprisonment left a gap.
Where a debt is substantial and the assets equally so, there is the remedy of bankruptcy proceedings. Where a debtor has a bank account, there is the remedy of garnishee proceedings. Where the debt is below the minimum which would support bankruptcy proceedings or the debtor has few assets, bankruptcy is not appropriate. When dealing with a debtor who has no assets except future earning capacity, the sensible course is to get him to pay by instalments out of future earnings.
Where possible, judgment creditors should have at least that remedy. One step to close the gap was taken in 1971

with the attachment of earnings provisions, but they apply only when a debtor is in employment. Where he is self-employed, the attachment of earnings procedure is not applicable.
Some people felt that the administration order helped to provide something of an answer. It had been known to the law since 1883. It was already available under Section 148 of the County Courts Act 1959, but there, basically, it was on an application of the debtor. Unless the debtor chose to initiate the proceedings, they could not take place. It was available under the Attachment of Earnings Act 1971, but there, of course, only in the case of a debtor in employment. If one was dealing with a self-employed debtor, therefore, and the debtor chose not to apply for an administration order, there was a very real problem.
My noble Friend still quite regularly receives representations either from creditors or on behalf of creditors asking when something can be done to meet this very real problem of the self-employed debtor. The hon. Member for Harborough (Mr. Farr) raised this matter with the Lord Chancellor of the day back in 1973. I have been studying his letter, which emphasises the problem very fairly.
It was thought, therefore, that it might be helpful if this provision could be included so that an administration order could be made even where the debtor did not apply. It was also the solution to another problem, because it may not be only the debtor and the single creditor who have an interest in what is going on. There may be other creditors.
When one is dealing with most methods of execution, the creditor who first applies obtains priority. There is, therefore, little incentive for any single creditor to show indulgence to the debtor. That is a pity. Sometimes, if the creditors hold their hand, the debtor may survive a bad patch and may be able to pay off all his debts fully, which he could not do if someone asked for bankruptcy proceedings. Therefore, it might be to everyone's advantage that there should not be a race between creditors to use the other remedies. They may prefer order to be brought into the process, which is what the Payne Committee said in paragraph 738 of its report. I do not propose to read that as I appreciate that time is limited. However, that was why Clause 10 was introduced into


the Bill—as an attempt to meet those two very serious difficulties which my noble Friend is being constantly urged to meet.
The hon. and learned Member for Southport says that it does not meet the problem at all and that it is not an additional weapon in the armoury of the creditors. The debtor may be ordered to pay debts by instalments, but what is the sanction if he fails? That sanction, says the hon. and learned Gentleman, is simply to revoke the order under Rule 19 and allow a creditor to proceed with his other remedy, so he is no better off than he would be if the order had not been made in the first place and meanwhile all his other remedies are suspended.
I have three comments to make about that. First, in many cases there is no other effective remedy anyway. Where there is a more appropriate remedy, I imagine that normally the court would not make an administration order. It is worth pointing out that in Section 150 of the County Courts Act 1959 there is the proviso that, although normally the creditor may not proceed with his other remedies, he may do so with the leave of the court.
Secondly, I am sure that the hon. and learned Gentleman will not have overlooked Section 151 of the County Courts Act 1959. The creditor is entitled as of right to ask for execution against the debtor's goods. We must not now get into the muddle that we got into in Committee. We are talking here only about goods, and not all other assets—although these may often be the only assets which the debtor has anyway. I am aware that the Payne Committee envisaged repeal of that section, but, as both sides agreed in Committee, the Payne Committee was envisaging a whole package.
And I am bound to tell my hon. Friend the Member for Handsworth that the kind of package which Payne had in mind and which he has in mind is not available at present. Unhappily, it is not one of the options available to us.
I must be frank about this. Section 151 is not used at all frequently. Normally, by the time someone comes to apply for an administration order, execution against the goods has been tried already and has failed to produce anything. It is modestly helpful in the kind

of situation where the debtor transpires to have more goods than was originally thought.
Thirdly, and by far the most important point Clause 11 provides a sanction here. It provides an additional weapon in the armoury of the creditor, because the court can make a receiving order, and it can make a receiving order even if the debt is below the sum on which otherwise a bankruptcy petition could be founded. By this process, the situation can be brought—

Mr. Lee: I do not want to interrupt my hon. and learned Friend's flow of thought, but will he comment on actions on the court's own motion? The hon. and learned Member for Southport (Mr. Percival) seemed to deprecate this. I should have thought that there were many instances, not confined to this field of law, where it was not unreasonable, and of perhaps marginal advantage, for the court to have the power to undertake proceedings on its own motion, possibly when it got notice that the conduct of a party was reprehensible.

The Solicitor-General: I entirely agree. I shall respond to that point shortly, but perhaps I may finish what I am now saying.
The combination of Clauses 10 and 11 included an additional weapon in the armoury of the creditor. It may be asked why, if one can bring the situation within the bankruptcy process by these two steps, one could not do it in the first place, and why not remove the financial limitations on bankruptcy proceedings. The answer is that it is an attempt to get the balance as fair as possible between the debtor and the creditor. What was felt that this weapon should be available only after the debtor had been given the opportunity to pay by instalments and had failed to do so. Therefore, it is felt that Clause 10 would have cut ice. It empowers a court to tell the debtor that he must make an effort to pay by instalments, and it offers a real incentive to him to comply with that order. This is the view of experienced county court registrars.
I am aware of the views of the joint working party. They have already been mentioned by the hon. and learned Member for Southport. I echo his tribute to all the processes and consultations which


have taken place in this case. But this is not the view of the registrars. I do not accept what the hon. and learned Member said about the administration order being used very little. It is true that not all registrars regard it as an effective remedy. The practice varies from one court to another, but some courts find it very helpful.
The Payne Committee had this to say about it, in paragraph 742:
Its popularity has varied from district to district and it has met with differing success dependent upon the experience and enthusiasm of local county court officers. There can be little doubt that properly used it has met with great success and we have had many recommendations to the effect that the figure of £300 should be substantially increased"—
as of course subsequently it was.
I have here details of the number of occasions on which administration orders have been made in recent years. Perhaps I may recite them briefly. In 1969 there were 1,740. In 1970 there were 1,723. In 1971 there were 2,516; in 1972, 2,634; in 1973, 2,150; in 1974, 2,231; and in 1975, 2,100.
It certainly would be misleading to say that registrars generally do not regard the order as of importance. In Committee there was a reference to Mr. Registrar Meeke of the Sheffield County Court. He has said, in a letter:
It would appear to me that it will be possible, as soon as there is a judgment which is not honoured, for me to order a self employed person or an unemployed person for that matter, to file a list of his creditors and the amounts and presumably if he does not do so, enforce it by a normal 194. Upon him doing so make an Administration Order and if he does not pay under that, make him bankrupt. I am quite sure that by using the threat of bankruptcy, which is of course, more important to a self-employed person than to one who is in employment, we shall obtain a considerable amount of money.
In honesty, I must disclose that he added:
The clever thing is of course that it is being done without being noticed.
Perhaps we must take issue with him on that. That was his view on the subject.
I have here also a letter from the Past President of the Association of County Court and District Registrars—admittedly dated only yesterday—because we asked for some of these oral con-

sultations to be put in writing. He wrote:
We were particularly pleased with what is now clause 10, which had been previously suggested by us as a much needed improvement in the machinery for enforcing judgments. It will give the Court power to do what is often done now on a voluntary basis with a co-operative debtor and with the sanctions behind it we shall be able to deal with the unco-operative debtor, particularly the self-employed one against whom we have little remedy at present—a matter which has caused the practising members of the legal profession and the public much concern.
That is the view of the registrars.

7.0 p.m.

My hon. Friend the Member for Handsworth invited me to say something about the power of the court to make an order of its own motion. The court may be dealing with people of very little experience in such matters. Many of them will not have advice, and solutions to their problems too often go by default. The creditor may hope to get an advantage over other creditors. If the court waits for an application it may not come, although there may be a number of people who stand to benefit. I accept what my hon. Friend has said and I would echo it.

The reason why I have spoken at some length is that the Government do not believe that this clause is devoid of merit or advocates. It is not for that reason that I am accepting the amendment. I make no secret of the fact that the vigour of what was said about the clause in Committee took the Government by surprise. At one stage we hoped that we might meet all the various difficulties which were being expressed by a series of amendments, but it is quite clear that there is some real concern about this proposal. My noble Friend has considered it and he feels that it should not be introduced without further consideration and discussion. Measures of law reform obviously have a better prospect of success if they do not begin life in an atmosphere of strong controversy. But it does not follow that my noble Friend is persuaded that nothing can be done to solve the problems which we have been discussing.

I am content that the clause shall be deleted from the Bill, but I hope that there will be further consideration by all concerned. There is to be a review of insolvency law in due course, but I hope we shall not necessarily have to defer


the discussions until that full review has taken place.

My noble Friend and I propose to invite those concerned to discuss this matter further in the hope that we shall reach an accommodation which will satisfy all those who face these difficulties. With those words, I advise the House to accept the amendment.

Mr. Percival: I gladly echo the Solicitor-General's closing hopes. I hope this will not be the end but the beginning of discussions because I think that in the field we are talking about there is a lot to discuss. I mention two of the things to be discussed, namely, the suggested closing of the county court registrar judgments and the possible transfer from the High Court to the county court of all High Court judgments in respect of collection. They are all part and parcel of the same thing.

I absolutely agree with what the Solicitor-General's noble Friend has said—that law reform has a much better chance of succeeding if it is agreed. If that is something that parties in all parts of the House can agree upon it will probably get nearer to a better solution, particularly if it is agreed by those outside who practice in these particular fields. I echo the Solicitor-General's hope and assure him of our fullest co-operation in any such discussions.

I would only mention three points which the Solicitor-General made. He referred to the Payne Committee. While the Payne Committee referred to the possible advantages of administration orders I am sure the Solicitor-General would be the first to acknowledge that it advocated the increasing use of them only in the context of the package which it put forward. I do not have a copy of the committee's report with me. Some hon. Members may be pleased because I might be tempted to quote from it. I am sure that in its recommendations about administration orders the committee stressed that these must be backed by the proper investigatory powers, and full powers to get any assets. The trouble with our reference to the Payne Committee is that the committee worked for a long time and produced a comprehensive report and recommendations which were a package. What we have done is nibble away at this package, at a num-

ber of small things; but we cannot deliver the essential part of the Payne Committee's recommendations, namely, the investigatory process.
I do not query the figures that the Solicitor-General mentioned but I do invite those who are concerned with this to look at the success rate of these orders. The Solicitor-General gave the number of orders that were made. I think I am right in saying that the average time taken for the collection of debts under administration orders is something like four years. That may be why they are not used more frequently. Of course, they went up considerably in the years that the Solicitor-General mentioned, because the upper limit of the jurisdiction was increased. Since then they have fallen off again. That is disappointing but it is a fact.
With these comments on the points made by the Solicitor-General I would finish by repeating that we echo the hopes expressed by the Solicitor-General. I assure him not only of our co-operation but of our real interest and desire to find some agreed improvement. It is necessary, if people's respect for the law is to be maintained, that some effective steps in the field that we are talking about are taken.

Amendment agreed to.

Clause 12

ADMINISTRATION ORDER RULES

The Solicitor-General: I beg to move, as a manuscript amendment, in page 10, line 42, leave out 'sections 10 and' and insert 'section'.

Mr. Higgins: On a point of order, Mr. Deputy Speaker. I do not think we have had notice of the manuscript amendment in its precise terms. Perhaps it may be as well to place it on the record.

The Solicitor-General: I mentioned earlier that I would move the manuscript amendment. I will see that the hon. Gentleman gets a copy.

Amendment agreed to.

Amendment made: No. 19 in page 11, line 1, leave out 'and section 21'.—[The Solicitor-General.]

Schedule 1

MONETARY LIMITS RELATING TO BANKRUPTCY AND WINDING UP

Mr. Clinton Davis: I beg to move Amendment No. 20, in page 12, line 9, column 3, leave out '£300' and insert '£200'.

Mr. Deputy Speaker (Sir Myer Galpern): With this we may take Government Amendment No. 23.

Mr. Davis: This was a matter which attracted the consideration of the Committee for a considerable time. We originally took the view that it was necessary to increase the minimum debt to support a creditor's petition for a sequestration order in Scotland, or a receiving order in England, to a figure of £300. We have reflected on this further, as a result of the deliberations we had with the professional bodies.
Although this matter was conceded by both sides of the Committee I have analysed the figures upon which petitions were founded and have come to the conclusion that there would only be a marginal benefit in relation to the work load if we were to raise the minimum debt to £300 instead of £200. Since this lower figure seems to accord with the view of the professional bodies, it is right, having regard only to these marginal benefits, that we should concede the case at least for the time being.
It is right to monitor the situation over, say, 12 months after this provision comes into effect. We shall then be able to determine whether we should move to amend the figure to £250 or £300, but it is now possible to adopt a flexible approach, having regard to an earlier amendment which we moved.
I hope that the hon. and learned Member for Southport (Mr. Percival) will agree that I need not rehearse now the calculations upon which my conclusions were based, but I should be very happy to provide him with that information if he requires it subsequently.

Mr. Percival: I welcome this amendment and all the others relating to figures. We are glad that the Government have accepted both the lower figure and the spirit in which we put forward all the

figures. The professions felt strongly about the figure of the minimum debt on which to found bankruptcy proceedings. They felt that it would make serious inroads to raise the figure to £300.
The Minister's argument about reducing the work load of the service, to which the Solicitor-General referred also, is misleading. The work load is heavy because the service which is supplied is one that people want. It would be curious to use a heavy work load as a reason for making the remedy less available. We should think instead of ways of satisfying the demand. If we want economies, perhaps we should look at remedies which are not being used. It is illogical to save by cutting services that people want. I hope that that argument will be viewed with great caution by Ministers, since it could be misleading and could lead to the opposite of the consequences we want. Subject to that, we welcome the amendment and all the other amendments on figures.

7.15 p.m.

Mr. F. P. Crowder: What does the Minister mean when he talks about monitoring the position in a year's time? Does he mean looking at it again, reviewing it or taking control of it? I do not care for that word.

Mr. Clinton Davis: I am sorry that the hon. and learned Member should take exception to the mild term "monitoring". I did not intend it as a term of abuse.
In answer to the hon. and learned Member for Southport (Mr. Percival), the reduction of the work load is part of a genuine problem. It is not a question of having a sufficiency of people or having people who are capable of pursuing these jobs pouring into this area of the Department. This is highly technical work and a great deal of training is required, but unfortunately the people are not available to match the requirements. We therefore have to consider ways and means of mitigating the intolerable burden which has fallen on this service in the last year or two. That is a fact of life.
Recruitment here is not easy. The hon. and learned Member for Southport will know this from his own experience. I know that he is not an expert in bankruptcy, although he has probably learned a great deal in recent months. We must


also take into account the fact that the service operates at a loss.
What I intended by the word "monitoring" was that my Department would be trying to scrutinise the results of this situation over the 12 months after this part of the Bill comes into operation. I should have thought that that term was readily understood. I hope that I have now explained it to the satisfaction of the hon. and learned Member for Ruislip-Northwood (Mr. Crowder).

Mr. Crowder: Surely the answer is that the Department will look at it carefully under a review, not on a monitoring basis.

Mr. Davis: The hon. and learned Gentleman has made a powerful intervention at this stage of our consideration of the Bill.

Amendment agreed to.

Amendments made: No. 21, in page 12, line 10 at end insert—


Section 79.
Maximum amount which trustee can retain without banking.
£100.'.

No. 22, in page 12, line 26, column 3, leave out '£120' and insert '£50'.

No. 23, in page 12, line 32, column 3, leave out '£300' and insert '£200'.

No. 24, in page 12, line 46, column 3, leave out '£600' and insert '£800'.

No. 25, in page 12, line 49, column 3, leave out '£600' and insert '£100'.

No. 26, in page 13, line 9, column 3, leave out '£120' and insert '£50'.

No. 27, in page 13, line 38, column leave out '£300' and insert '£200'.

No. 28, in page 13, line 40, column 3, leave out '£600' and insert '£100'.

No. 29, in page 14, line 3, column 2, leave out from 'for' to end of line 5 and insert
'service of statutory demand in case of unregistered company.'.

No. 30, in page 14, line 3, column 3, leave out '£300' and insert '£200'.

No. 31, in page 14, line 8, column 3, leave out '£600' and insert '£400'.

No. 32, in page 14, line 20, at end insert—

'2. No reduction in any sum specified in—

(a) section 174 or 175(6) of the said Act of 1913;
(b) section 105(1) or 129 of the said Act of 1914; or
(c) section 218(3) or 220(3) of the said Act of 1948,

shall affect any case in which the proceedings were begun before the coming into force of the reduction.
3. No increase or reduction in the sum specified in section 38(2) of the said Act of 1914 shall affect any case in which the date of the receiving order occurred before the coming into force of the increase or reduction.'.

No. 33, in page 14, line 21, after 'increase', insert 'or reduction'.

No. 34, in page 14, line 24, after 'increase', insert 'or reduction'.

No. 35, in page 14, line 25, after 'increase', insert 'or reduction'.

No. 36, in page 14, line 26, after '(c)', insert or 50(3)'.

No. 37, in page 14, line 31, after 'increase', insert 'or reduction'.

No. 38, in page 14, line 32, after 'increase', insert 'or reduction'.

No. 39, in page 14, line 36, after 'increase', insert 'or reduction'.

No. 40, in page 14, line 37, after 'increase', insert 'or reduction'.

No. 41, in page 14, line 41, after 'increase' insert 'or reduction'—[Mr. Clinton Davis.]

Schedule 2

CONSEQUENTIAL AMENDMENTS RELATING TO INSOLVENCY SERVICES ACCOUNT

Amendments made: No. 42, in page 15, line 1, leave out', (2).—[Mr. Clinton Davies.]

Schedule 3

REPEALS

Amendments made: No. 43, in page 16, line 17, at end insert—


1965 c. 2.
The Administration of Justice Act 1965.
Section 21.'.

No. 44, in page 16, line 23, column 3, at beginning insert Section 4(3).'—[Mr. Clinton Davis.]

Order for Third Reading read.

Mr. Deputy Speaker: The Queen's Consent must be signified. We need a Privy Councillor here.

Mr. Clinton Davis: On a point of order, Mr. Deputy Speaker. I thought that the presence of a Privy Councillor was required at the end of the debate on Third Reading. But I gather that my right hon. Friend the Secretary of State for Trade has been called for and is on his way, so the requirement will be met in a moment. I wonder whether you would indicate the specific requirement, Mr. Deputy Speaker.

Mr. Deputy Speaker: It is very simple. We require a Privy Councillor to signify the Queen's Consent. If we do not have a Privy Councillor present, there is nothing I can do. The Queen's Consent must be signified at this stage.
I see that a Privy Councillor is now present.

[Queen's Consent, on behalf of the Crown, signified.]

7.21 p.m.

Mr. Clinton Davis: I beg to move, That the Bill be now read the Third time.
I shall not prolong the proceedings unduly, but I think it appropriate to make one or two comments about the Bill as it has now emerged and the future course which the Government propose to take in relation to the law of insolvency.
There is clearly a need for a Bill of this kind. This was evidenced by the general approval by all those concerned with insolvency law and practice of many of the main features of the Bill. It is not surprising that a number of people did not think that it had gone far enough. I have a good deal of sympathy with that view. But our intention, within the constraints of a Bill which had to be dealt with under the Second Reading Committee procedure, was to include only the most urgently needed changes, particularly with regard to the restoration of the value of the monetary limits in the Bankruptcy Acts and the winding-up provisions of the Companies Act 1948. In many cases the monetary limits are the same today as they were in 1914 or even earlier.
There is a clear and overwhelming need for a review of the whole law of

insolvency. For this reason my right hon. Friend the Secretary of State for Trade announced to the House on 25th October that he was setting up a departmental inquiry under the chairmanship of Mr. Kenneth Cork to carry out a fundamental and exhaustive reappraisal of all aspects of the insolvency laws of England and Wales.
An attack was made on Mr. Kenneth Cork by my hon. Friend the Member for Bolsover (Mr. Skinner) during the course of our deliberations. With respect to my hon. Friend, it was an unfair attack. Mr. Cork's expertise is well recognised in this country. He has undertaken a very valuable process of inquiry into the EEC position in relation to the law of insolvency. His chairmanship has been expert and most useful.
A review of Scots insolvency law is already being undertaken by the Scottish Law Commission and we are making arrangements to keep the two review bodies fully informed of each other's thinking and progress. This is particularly important in view of the discussions which are currently taking place in Brussels with the object of drafting an EEC bankruptcy convention. This convention is not intended to alter national laws save in a comparatively small area of law dealing mainly with the validity or otherwise of certain kinds of transactions taking place during what is known as the suspect period immediately before a bankruptcy or company liquidation. It will, however, provide a set of rules to prevent multiple bankruptcies and to enable a bankruptcy or company liquidation taking place in any member State to have effect throughout the Community. Clearly, both review bodies will have to have regard to the effect of this proposed convention when considering what changes ought to be made in our national insolvency laws.
One of the features of the work on this Bill in Committee and subsequently which I found gratifying—it was mentioned by the hon. Member for Worthing (Mr. Higgins) and the hon. and learned Member for Southport (Mr. Percival)—was the degree of personal consultation in which I was able to engage with members of the professions primarily concerned with the law of insolvency and, indeed, with both hon. Members. All of us had the aim of seeking to ensure that, within


the limits of a Bill selected for the truncated Second Reading Committee procedure, with necessarily limited objectives, we should secure some urgently needed changes in the law and also erase certain anomalies. The constructive dialogue which took place has, I think, improved the Bill and achieved those immediate goals we had set ourselves. It reflected well on the measure of co-operation between the Government and the Opposition on what was not a politically controversial Bill but was nevertheless, in certain respects, contentious. The changes which we have made have been quite significant.
There will no longer be an obligation to hold a public examination in every bankruptcy. This will spare debtors, in suitable cases, unnecessary publicity. We are providing, for the first time in England and Wales, for automatic discharge for bankrupts in some cases and for automatic review for the purpose of discharge in the others. In future the only reason for a bankrupt remaining undischarged for a long period, even for life, will be if his conduct so warrants it.
There are valuable changes which I am convinced will give quite large numbers of people who merit the chance the opportunity to free themselves of a stigma and to make a fresh contribution to society, which, perhaps, our previous law did much to impair. The new Insolvency Rules Committee will ensure that those who operate our insolvency laws in practice will be closely involved in seeing that the procedural rules are kept up to date and in advising upon what changes are needed. We are making a determined effort to prevent those persons who are not fit to manage companies, as demonstrated by the failure within a certain period of any two companies in which they have held directorships, from being a director or from taking part in the management of another company for a specified term. These represent valuable changes in the law and, therefore, I commend the Bill to the House.

7.28 p.m.

Mr. Higgins: I join the Under-Secretary in paying tribute to those who have engaged in consultations on the Bill. When it was first drafted and introduced, there had not been consultation as wide-

spread as was necessary if we were to ensure that the law was changed in a generally satisfactory manner. But since then the debates here and in Committee and the consultations have resulted in great improvements in the Bill.
I shall not say that there was never a dull moment in our discussions. Indeed, I could not tell what was going to happen from one moment to the next. I was looking forward to hearing a speech by you, Mr. Deputy Speaker, about the need for the Queen's Consent to be signified, but we avoided that last-minute hurdle.
The changes made as a result of the Opposition's representations are substantial and not simply some of the traditional points such as making changes subject to affirmative rather than negative resolution. We managed to persuade the Government that many of their suggested monetary limits were not appropriate. We also managed to reduce the element of retrospection in the Bill, a matter which the House always regards as important. We have also had Clause 10 deleted. I shall not go over the debates we had on that.
I pay tribute to my hon. and learned Friend the Member for Southport (Mr. Percival) who has throughout given great help to the Committee and on the Floor of the House on technical matters. This involved him in a great deal of work. I do not think that any of us would underestimate the amount of work done by him on behalf of the Opposition, who do not have the back-up which the Government have from the Civil Service. As a result of that hard work, the changes that have been incorporated in the Bill have greatly improved it.
There is one point on the broad principle of what is still in the Bill that I wish to emphasise. Throughout, the aim has been to strike a balance between creditors on the one hand and debtors on the other. When the Bill was first introduced, my hon. and learned Friend the Member for Southport and I felt strongly that the balance was not right and that the position of creditors was being further eroded. I hope that as a result of the changes that have been made we have helped to get the balance back to where it should be.
The Minister said that a committee is to be set up under Mr. Kenneth Cork to look into the whole question of insolvency


law. I should be out of order, Mr. Deputy Speaker, if I went into detail, but that proposal is to be welcomed. Although hon. Members are concerned about the proliferation of committees, this is a complex matter which needs to be examined in depth.
I am a little worried, given the changes that we have made in the Bill, that it is suggested that the committee might sit for two or three years before completing its work. Another document has been laid before us, Cmnd. 6602, the Report of the Advisory Committee—also under the chairmanship of Mr. Kenneth Cork—entitled "The EEC Preliminary Draft Convention on Bankruptcy, Winding-up, Arrangements, Compositions, and Similar Proceedings". It would be helpful if the Minister would say whether any action is to be taken on that report before the other committee under Mr. Cork's chairmanship completes its work.
The precise relationship between the two committees is important, and it would be absurd if we were to consider altering our laws without taking account of the position of the EEC and the relationship between the two sets of proposals. The proposals are not co-extensive and the report which I referred and which runs to 180 pages draws attention to several differences and problems which we are likely to have to face.
The Bill is a useful measure with the Companies (No. 2) Bill, which was recently given a Third Reading. It is a much improved piece of legislation. It reflects the way in which the House of Commons, when there is no guillotine and the Government are not determined to force through legislation regardless of drafting, can do its work properly. This is a good example of the way in which legislation should go through the House compared with the way in which other legislation has been dispatched.
I express my thanks to the Under-Secretary of State and the Solicitor-General who has assisted him on the Front Bench for the way in which they have patiently considered the arguments put to them and worked hard behind the scenes. The results are incorporated in the Bill, to which I am sure the House will wish to give a Third Reading.

7.33 p.m.

Mr. Clinton Davis: I should like to respond briefly to the points made by the hon. Member for Worthing (Mr. Higgins). There will be an inter-relationship between the work done by the committee which deliberated on EEC matters under the chairmanship of Mr. Kenneth Cork and the committee to be set up under the same chairman. I am advised that it is likely to be two or three years before the review on the insolvency law in England and Wales will be completed. A committee is also deliberating on Scottish law. There are a number of provisions in relation to insolvency law which will not be affected by EEC legislation.
As to the degree of co-operation, the hon. Gentleman must reflect upon the fact that the Opposition's attitude to the Bill, which was extremely co-operative and helpful, is not always the Opposition's attitude. Unhappily, the Opposition frequently adopt a somewhat irrelevant attitude to many of the issues that face the country today.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Orders of the Day — NORTHERN IRELAND (FIREARMS)

7.35 p.m.

The Under-Secretary of State for Northern Ireland (Mr. James A. Dunn): I beg to move,
That the Firearms (Amendment) (Northern Ireland) Order 1976 (S.I., 1976, No. 1341), a copy of which was laid before this House on 18th August, be approved.
This Order in Council was made on 17th August 1976 under the procedure provided for in the Northern Ireland Act 1974 whereby, for reasons of urgency, an order can be made without a draft having been approved by Parliament, provided that it is subsequently approved by a resolution of each House within 40 days after it is made, subject to extension for periods of prorogation, adjournment or dissolution for more than four days.
The order increases the maximum penalties on indictment in respect of three offences under the Firearms Act (Northern Ireland) 1969. These are


carrying a loaded firearm in a public place, trespassing with a firearm in a building, and possessing a firearm or ammunition in suspicious circumstances.
Right hon. and hon. Members may recall that towards the end of last year the House approved an Order in Council which, among other provisions, revised some of the penalties under the 1969 Act and in doing so brought all the penalties under the Act into line with those which applied in Great Britain. The present amendment of the law doubles the maximum penalties on indictment for the offences mentioned from five years to ten years.
The revision is a recognition of the considerable extent to which the carrying of illegal firearms contributes to the violence in Northern Ireland. For example, the House will be aware of the existence of what have come to be known as the "travelling gunmen" and the criminal and murderous activities in which they engage. When these men are apprehended, often the only offences for which they can be charged and brought before the courts are the offences under the Firearms Act, and it is important that appropriate penalties should be available.
As the House will be aware, it is the Government's policy that terrorists should be proceeded against through the courts. In these circumstances, it is vital that the penalties which the courts can impose should reflect the needs of the situation and constitute an adequate deterrent.
My right hon. and learned Friend the Attorney-General, speaking on 2nd July 1976 in this House, announced that the Government, having considered the penalties prescribed by the Firearms Act (Northern Ireland) 1969, had concluded that the existing penalties under Section 17—carrying a firearm in a public place—and Section 19A—possessing a firearm or ammunition in suspicious circumstances—were inadequate and should be changed. He added that other increases might be appropriate and were being considered
It was subsequently decided that, since there was an obvious link between the offence of carrying a firearm in a public place—Section 17—and trespassing with a firearm in a building—Section 18(1)—the maximum penalty for the latter offence, which was previously five years, should also be doubled.
In view of the continuing high level of violence involving firearms my right hon. Friend decided to adopt the urgent parliamentary procedure to which I have referred in the making of this order so that the increased penalties could be introduced with the minimum of delay. I hope that right hon. and hon. Members will accept that there is an urgent and immediate need for this order. I therefore commend it to the House.

7.40 p.m.

Mr. John Biggs-Davison: The order to follow is of the size and scope of a Bill and perhaps hon. Members will want to speak upon it at some length. I do not mean that this is not an important order—clearly, it is most important for public safety in Northern Ireland. However, I do not think that I shall do wrong if my comments on behalf of the official Opposition are brief.
The order has been lucidly explained by the Under-Secretary of State and its necessity and urgency have been made out. We could hardly expect less from the Government since the increase in the remission of sentences announced last year. If gunmen are given a maximum sentence of five years, they can be released after serving two and a half years in prison. The order redresses the balance.
My hon. Friend the Member for Abingdon (Mr. Neave) and other of my hon. Friends have argued from time to time, following Lord Gardiner's Committee, that the institution of a general offence of terrorism could simplify prosecutions and be of assistance in the enforcement of law and order, but the Government have not seen their way to implement the recommendation of the Gardiner Committee. In the absence of such an omnibus charge with a special scale of sentences and a heavy maximum sentence, many gunmen commit the offence specified in Article 3(2). They do so in the knowledge that they can be charged only under the Firearms Act. Indeed, the Under-Secretary said as much.
It is a reasonable prima facie assumption that those acting in the manner prescribed in Article 3(2) are concerned in terrorism or other violence. One may even wonder whether 10 years is sufficient in the anarchy that is Northern Ireland today.
Finally, I ask the hon. Gentleman to give some indication—I know that it is difficult for him to give precise figures—of whether there has been an increase in the number of persons charged under the regulations in recent months. What is the average length of sentence imposed upon those who are convicted? I ask for the assurance that the Government will keep the length of sentences under review. The sentences contained in the order may not prove sufficient. I shall be grateful if the hon. Gentleman takes up those two points.

7.42 p.m.

Mr. McCusker: On behalf of United Ulster Unionists I give a qualified welcome to the order. It is qualified not because we object to the fact that the sentences are being doubled, but because we doubt the order's effectiveness. As the hon. Member for Epping Forest (Mr. Biggs-Davison) has said, the order may restore the status quo in some respects. The 50 per cent. virtual automatic remission now granted to convicted terrorists has reduced the sentences of the courts of a few years ago to something that is almost meaningless. However, as the Under-Secretary of State said, the order has been introduced because the Government consider that its provisions will be an adequate deterrent. I have seriously to question that judgment.
Would the murderers who entered my constituency two weeks ago have been deterred by the knowledge that they might have been sentenced to a 10-year sentence if they were caught? They drove to what would have been considered a fairly safe area in Annaghmore in County Armagh armed with the most sophisticated eastern European rifles, not revolvers that might easily have been concealed. They murdered one man and wounded his 18-year-old son. In fact, the son died on Sunday, so they murdered two men.
Would the 10-year sentence have caused concern to the murderer who, three hours ago, walked into a supermarket on the main shopping street in Armagh city and murdered a member of the Ulster Defence Regiment in broad daylight in front of other customers?

Would it have caused him to prick up his ears? Would it have caused him to think before he committed the offence? I have to say that I doubt whether it would have had that effect.
I doubt the effectiveness of the order. In some respects we are putting the cart before the horse. The persons with whom we are dealing will be deterred only if they feel that they will suffer as a consequence. It will be a deterrent only if there is evidence that those who commit these crimes will be brought before the courts and sentenced to 10 years' imprisonment.
I refer the House to the 100 murders—there must have been 100—that have occurred in my constituency over the past year. They were committed by people carrying loaded firearms in public places. To my recollection not one of them has been brought to justice this year. Not one of them is likely to suffer the penalty that he would have incurred if he had been caught before he perpetrated such foul deeds.
Mr. Wilson was murdered today, a member of the Ulster Defence Regiment. I have no doubt that one of the reasons for his murder was his membership of the UDR. However, two or three years ago his wife was brave enough to go into court and give evidence against IRA men. Those men were subsequently sentenced. The IRA threatened revenge against the family, and no doubt it exacted it today.
Perhaps we should be considering how we can encourage and protect public-spirited people who are prepared to go into court to give evidence. Perhaps that would be a more positive approach in the fight against terrorism than introducing an order to double the sentences. Those are the questions that I must ask myself. Is it not more important that the Government consider all the events leading up to sentencing than only the sentences? Should we not be considering how we can improve the possibility of the police being able to arrest suspects, obtain evidence, get convictions and get convicted persons put away for 10 years before we concern ourselves with a sentence of 10 years?
I hope that the thousands of people who marched for peace in Armagh a


fortnight ago will realise that marching is not enough. It is necessary to work for peace, and part of that work is telling the security forces the name of the murderer who this afternoon committed his foul deed in broad daylight. Someone is harbouring him tonight. Peace will come to Armagh only when the people have the courage to produce him and have him properly dealt with.
We welcome the order as a partial step and a staggered attempt to do something. However, I fear that the day may come when the penalty for these offences may be even more Draconian than those now suggested. I hope that the day will never come when we have to do what was done in the Republic in the 1920s when people were put against a wall and shot when found in illegal possession of a firearm. If the anarchy continues which now prevails in my constituency and which has prevailed for 12 months, that day may not be far off. I hope that it will never come and I hope that the order will do something to prevent its coming, but I have grave reservations.

7.49 p.m.

Mr. Clement Freud: The incidence of bombing and sabotage increased in 1976 over the 1975 figures. I know that the Minister will give us the figures in his own good time.
The recent flurry of armed activity by the Provisionals is a clear sign of their desperation in the face of the peace campaign. The security forces have had increasing success in the tracking down and arresting of IRA personnel, as well as the discovery of equipment. It is vital that we should build on this success. We must produce a situation of calm and general security within Northern Ireland so that the essential political discussions can resume with some hope of success. That cannot be done if the participants in such discussions are at the mercy of gunmen.
Our basic support for the Government's policy for the role of the security forces must not blind us to the importance of establishing good community relations.
It is unfortunate, to say the least, that there have been some incidents recently in which the Army has been involved

and which have not helped the peace movement. I hope that there will be a full investigation into the recent case which revealed that original Army evidence was false and resulted in wrongful imprisonment. Nothing could be more guaranteed to ensure that the IRA maintains its support than misbehaviour by any section of the security forces.
We have witnessed the burgeoning of the peace movement, and it should be placed on record that the peace movement has displayed amazing courage and tenacity in resisting intimidation and brutality by the terrorists. All people in Ireland must hope that the indiscriminate use of violence will be resisted, for meaningful political progress cannot be made without some peace and tranquility within the area, and, most importantly, that British forces will remain there until such time as peace reigns again.
In this context the Liberals support the order.

7.52 p.m.

Rev. Ian Paisley: My hon. Friend the Member for Armagh (Mr. McCusker) poured a bucket of cold water down our spines. He brought home to us the fact that Northern Ireland is not at this time worried about political dialogue, but about people being enabled to live.
The hon. Member for the Isle of Ely (Mr. Freud), as spokesman for the Liberal Party, must acquaint himself with the true situation in Northern Ireland, where people are in desperation to live their lives. The sooner security reaches the stage where those people are allowed to do so, the better. Therefore it is useless to talk about some kind of political settlement unless those conditions are established.
There is only one way by which one can have true democracy, and that is by guaranteeing citizens their lives so that no man speaks under threat of intimidation. At present, alas, that is not the situation in Northern Ireland.
I am sure that the Under-Secretary of State knows the situation, because he has been in Northern Ireland for some considerable time. I am sure that he is aware of the feelings of the ordinary people of Northern Ireland. It is all very well for the Liberal spokesman to hail certain successes by the Army and the


police, but it is a startling and terrible fact that in the constituency of Armagh two dastardly murders have recently taken place. I refer to the murder in Tullyvallen and that at Kinsgmills, Bess-brook. Nobody has yet been charged with committing those dastardly deeds. My hon. Friend has already told the House that 100 murders have been committed in his area and as yet nobody has been charged with any offence in relation to those matters. These are the matters that concern us when debating this order.
The Liberal spokesman should have made clear that those who attack the so-called peace marchers are not from the Protestant side. They come from their own religious side of the fence.
Accusations have been made against members of the British Army. It should be pointed out that in the case referred to by the hon. Member for the Isle of Ely some evidence given in court was contradicted by later evidence. Indeed, the person who gave evidence had already been charged with an offence, had been court-martialled and dishonourably discharged from the Army. If that evidence had been put forward from a witness of good standing in the British Army, one would have given it more credence. The judge gave the benefit of the doubt in that case.
We feel that justice must be upheld. We certainly feel that British justice in Northern Ireland will gain when the benefit of the doubt is given in a particular case. But let us not take the view because one person's evidence is contradicted by other evidence that the original evidence should be regarded as being the absolute truth and the other as falsehood. We must get the balance right.
Will the Minister say whether in firearms offences the onus of proof is on the accused or whether it is for the Crown to prove the case against the accused? If the onus is on the accused, the grip of the law on the individual is tightened.
I agree with my hon. Friend the Member for Armagh that the fact that we now have in these provisions a 10-year sentence will not alter the situation a great deal. Will the Minister consider the imposition of mandatory sentences, in other words, a fixed sentence in respect of a person who is found guilty? A mandatory sentence may well provide a

greater deterrent than a sentence up to a maximum of 10 years.
I agree with my hon. Friend that we should be living in cloud-cuckoo land if we thought that this order would be a great deterrent to men who are engaged in murder in Northern Ireland. Nothing will stop those men in their determination to inflict ravages on the community until this House is prepared to take the ultimate into its hands and say that a person who commits a capital crime should suffer capital punishment.

7.58 p.m.

Mr. Dunn: I hope that I shall be able to deal briefly with all the points raised in this short debate.
I hope that the hon. Member for Armagh (Mr. McCusker) will convey to the family of Mr. Wilson our sympathy and condolences in the tragedy that has befallen them, as on other occasions to the many other families who have been similarly bereaved. My right hon. Friend the Secretary of State for Northern Ireland and his colleagues in the Northern Ireland Office wish to share in the sympathies extended to the Wilson family in their hour of need.
I shall try to deal with observations briefly, although not necessarily in the order raised. It is always difficult to talk about new law in a setting where tragedy occurs in the context of Northern Ireland, but this evening we are dealing with the penalties for the possession of firearms. Therefore, if I do not take up the theme mentioned by the hon. Member for Armagh it is not because I do not understand his feelings or the problems that confront his constituents and others in the Province, but because I wish to confine my remarks to the order before the House. If only we could apprehend all those who carry firearms by imposing a sufficient deterrent penalty, the incidence of murder and maiming would be seriously diminished.
We are in the difficulty that we are trying to deal with firearms here and not with the other weapons of terrorism. It is against that setting that I answer his point. I agree with him that if help and support for the security forces were given and information made available about those who perpetrate such offences against the community and the security of the individual, it would be to the


advantage of the Province as a whole and would bring peace much sooner than is apparent in the circumstances confronting us today.
The hon. Member for Epping Forest (Mr. Biggs-Davison) asked me about the number of people charged. Statistics are not easy to provide in great detail, but 672 persons were charged in 1975 under the relevant sections and in the same year 593 persons were convicted. The hon. Member will appreciate that there is always a time lag between the charge being made, the court hearing and the eventual conviction. Between January and June this year the comparable figures were 307 persons charged and 237 convicted. There has been a great surge forward in preparing the documentation necessary for charging, and more convictions will certainly emerge. The success rate of the RUC is very marked in this regard.
On the question of the review of sentences, the Attorney-General indicated in a previous debate that he would keep this matter constantly under review and recommend an increase in sentencing where this would be of immediate help to the security forces and the police. However, I must say that one of the grave problems confronting the security forces in the province is getting sufficient evidence to procure a conviction. It is in that area that we need to do much more work. I am sure that all those in this House who are involved in the situation will help to secure that objective.
The Chief Constable is concentrating all his efforts on improving the ability of the force to detect those engaged in terrorism. He is trying with reorganisation to build up sufficient active preparation of the documents required to take the cases into court so that convictions can be obtained.
So far this year 87 persons have been charged with murder. That figure does not relate to the charges I read out about carrying firearms.

Mr. Freud: What percentage of all murders committed does that figure of 87 represent?

Mr. Dunn: I am in some difficulty here. So many murders are committed that I could not possibly say without knowing the time scale for which the hon. Member wishes to make the comparison. If he will let me know, I will write to him.

Mr. Freud: The period I have in mind was the period during which the 87 were apprehended for murder.

Mr. Dunn: I will write to the hon. Member and give him these facts. I cannot take such statistics out of the top of my head.
The hon. Member for the Isle of Ely (Mr. Freud) talked about improving community relations as part of the ongoing exercise to deal with the problem of carrying firearms. He suggested that we should encourage those people with information to give it to the security forces, or at least to have sufficient anxiety and concern so that when they find people carrying firearms they will, by some method, make the information available to the security forces and assist in acquiring the necessary facts to charge them. I agree with him about that.
He will appreciate that there are difficulties about giving any answers to his other questions because investigations and inquiries are being undertaken at present and it would be wrong for me to pass any opinion at this stage. I shall draw the attention of my right hon. Friend to what has been said.
The hon. Member for Antrim, North (Rev. Ian Paisley) asked me a question of fundamental importance to the present situation. If a person is charged with one of these offences and claims a defence of reasonable excuse, the onus is on him to demonstrate that reasonable excuse. However, I believe that uppermost in all our minds is the fundamental principle of English law—that in the main the onus of guilt rests on the prosecution. There are circumstances in which that principle would have to be regarded if there were claims from an individual that he was carrying such arms under intimidation or with reasonable excuse. There would be great difficulties. I shall draw my right hon. Friend's attention to the point.
There are many difficulties in the way of introducing mandatory sentences as the hon. Member for Antrim, North has suggested. In jurisprudence it is always the view of those who make representations and are consulted that each case must be considered on its merits. What we do is legislate for a range of sentencing which is available to the court, taking


account of all considerations and circumstances of merit in each individual case, and any disadvantages which might occur for the presentation of the prosecution, or the case for the defence. It would be alien to general practice of this House to legislate for mandatory sentences. There would be grave difficulties. However once again, I shall draw this matter to the attention of both my right hon. Friend and my right hon. and learned Friend the Attorney-General.

Mr. Kevin McNamara: Before my hon. Friend sits down—

Mr. Deputy Speaker: The hon. Gentleman has already sat down.

8.9 p.m.

Mr. McNamara: I thought that I had caught my hon. Friend suspended in mid-air.
Mandatory sentencing has a most unhappy history in the Six Counties. It caused no end of trouble and difficulty for the police. There were many cases where the law was got around because the police did not always want to bring about the mandatory sentences in cases where there was obvious guilt but mitigating circumstances. With serious criminal offences it is essential that each case should be looked at on its individual merits.

8.10 p.m.

Mr. F. P. Crowder: I have a question for the Minister to which I ought to know the answer, and I apologise for not knowing it. In this country a person who is sentenced to, say, 12 years' imprisonment and who behaves himself gets a remission of one third of his sentence. A further consideration is that he can go before the Parole Board. Do those provisions exist in Northern Ireland?

8.11 p.m.

Mr. Dunn: With the leave of the House I shall answer the last question first. We in Northern Ireland do not have a system similar to that described by the hon. and learned Member.

Mr. Crowder: Is there a parole board?

Mr. Dunn: No, the system is entirely different.
I turn now to the question from my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara). I must tell him that each and every case must be considered on its merits. I know of the difficulties which arose with mandatory sentences in the past. I know the problems these caused in individual circumstances. Concern was expressed by those who had to apprehend and charge offenders who were covered by this code. Let me say merely that when any hon. Member brings up a point of fundamental importance I can confirm that such matters will be drawn to the attention of the Secretary of State and of my right hon. and learned Friend the Attorney-General who are better versed and more experienced in them than I.

Question put and agreed to.

Resolved,
That the Firearms (Amendment) (Northern Ireland) Order 1976 (S.I., 1976, No. 1341), a copy of which was laid before this House on 18th August, be approved.

Orders of the Day — NORTHERN IRELAND (HOUSING)

8.12 p.m.

The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): I beg to move,
That the Housing (Northern Ireland) Order 1976. a draft of which was laid before this House on 5th August, be approved.
I am sure that the House would want me to place on record our thanks to my predecessor the hon. Member for Mansfield (Mr. Concannon), who was principally responsible for drawing up this order, which is extremely complex by Northern Ireland standards. He carried out a lot of the negotiations with various individuals and groups. I merely present the order to the House tonight, and in doing so I would wish the House to recognise precisely the part that my hon. Friend played in it.
We have in the Northern Ireland Housing Condition Survey and the Northern Ireland Household Survey clear and irrefutable evidence of the extent and magnitude of the housing problems in Northern Ireland and, in particular, of the poor condition of much of the existing stock. The Government are currently looking at housing policy in Great


Britain, and Northern Ireland has been associated with this review, as well as carrying out a re-examination of the particular policies which are needed in Northern Ireland.
There can be no doubt that housing as a whole must continue to enjoy a high priority. In particular, we must find more effective means—while recognising the constraints arising from violence and its consequences—to deal with the existing stock. This order represents a major step in that direction. Last week we published proposals for the future of the private rented sector, and yesterday a report on tenant participation and new forms of housing tenure was released.
In the past many people have tended to see the solution to Northern Ireland housing problems in terms of more and more new houses. Of course the new construction side of the work is and will remain important. But we have an existing stock of almost 460,000 houses and I am satisfied that we need to devote more attention to preserving those which are, or can be made, fit and to re-deploy our resources accordingly.
There is a massive programme of improvement and rehabilitation which must be given high priority, not only because it makes economic sense, but for the even more valid reason that it is right in social and human terms. I see the preservation of established communities as a highly desirable objective and one which is attainable through programmes designed to raise the standard of existing homes and the environmental quality of neighbourhoods—particularly in places like the inner parts of Belfast which are not affected by redevelopment. I also want to encourage people to play a greater part in meeting their own housing needs. I hope and believe that hon. Members representing Northern Ireland constituencies will support that line of approach to our problem.
The draft order now before the House is a measure of the Government's commitment to this task. It is also the main instrument by which results will be achieved. The order contains four major proposals. First, Parts II, III and IV will provide for an expansion of the work of the voluntary housing movement. Secondly, Part V will give the Housing

Executive new powers to tackle areas of housing and social stress. Thirdly, Part VI proposes the introduction of a new structure of grants for house renovation in the private sector. Fourthly, Part VII will give the Executive new powers to deal with unoccupied premises. I want now to explain these proposals in more detail.
In the past housing associations have not played a significant role in Northern Ireland, largely because of the inadequacy of the financial help which was available. I want to see them playing a much bigger rôle, in particular in rehabilitating existing houses and building new houses for special groups like the elderly and handicapped. I hope also that housing associations will be prepared to experiment with new forms of tenure which will, in particular, help young married couples.
Parts II, III and IV of the draft order provide a new charter for the housing association movement in Northern Ireland. They follow broadly the provisions of the Housing Act 1974 as well as consolidating the existing Northern Ireland law on housing associations. The Department of the Environment for Northern Ireland will, under Article 4, play the rôle which the Housing Corporation plays in Great Britain in promoting the expansion of the voluntary housing movement and supervising its work.
Part II provides for the Department to establish and maintain a register of housing associations. Broadly the same criteria for registration of housing associations will apply in Northern Ireland as in Great Britain. Only registered associations will be eligible for loans from the Department of Finance and grants from the Department of the Environment. The Department will have wide powers to ensure that associations operate in a proper way. It will be able under Article 12 to acquire land on behalf of associations. Part IV sets out the financial assistance housing association grant, revenue deficit grant and hostel deficit grant—which will be available. These are based very closely on the grants which exist in Great Britain. Tenants in housing association houses will under Article 9 be elegible for rent rebates and rents will, under Article 8, be subject to the Department's approval.
Since the intention to prepare this legislation was first announced, there has been a considerable strengthening of the voluntary housing movement in Northern Ireland, assisted by my Department. A Northern Ireland Committee of the National Federation of Housing Associations has been set up; some of the existing associations have started to bring forward new schemes; successful associations in Great Britain have helped to sponsor new associations in Northern Ireland, particularly to deal with the needs of the elderly and the handicapped. In addition a number of new community-based associations have emerged and are beginning to have an impact in purchasing and rehabilitating older houses.

Mr. J. Enoch Powell: The Minister said just now that Part IV sets out the various forms of grant available to housing associations. What it does not do, apparently, is to indicate the relationship of grants with costs, in contrast, for example, with Part VII. Will the Minister, either in the course of his speech or when he intervenes later in the debate, give more indication of the principles on which the grants will be available than appears to be in the face of the order?

Mr. Carter: Perhaps I may come back to that point when I wind up the debate. It is a fairly technical question and one upon which I should like to give the right hon. Gentleman a precise answer.
Part V of the draft order will enable the Housing Executive to declare housing action areas. Following the Housing Act 1974, these areas will be relatively small areas in which urgent action is needed over a five-year period to tackle housing, environmental and social problems. We have decided that, because of the scale of the problems of disrepair and lack of amenities in the housing stock in Northern Ireland, the housing action area approach should not be supplemented by general improvement areas and priority neighbourhoods which are provided for in Great Britain legislation. Also we have not thought it appropriate to follow the provision in the Housing Act, 1974 for compulsory improvement, though I shall want to reconsider this in the context of future legislation on the private rented sector.
In a housing action area the Executive would endeavour to encourage owners to improve their homes. It would, under Articles 36 and 37, itself acquire and improve houses. Efforts would also be made under the provisions of Article 38 to improve general environmental conditions and, in conjunction with the appropriate bodies, to upgrade social, community and recreational facilities. In suitable cases a housing association could undertake a major part of the task of purchasing and rehabilitating houses. In all this work, it will be essential to establish and maintain the closest possible liaison with the local community.
I hope that the housing action area approach will enable substantial progress to be made in arresting and reversing the decline of the twilight areas in Belfast and other towns. But I issue a word of caution against over-optimism. Many of the areas which most need action are in, or near, confrontation areas. They are in decline because houses have been damaged in the civil disturbances and because families are reluctant to live there. The task of rescuing such areas involves more than simply repairing and improving houses; it involves restoring confidence in the future of the area and this will be no easy task.
The Housing Executive has already embarked on a number of pilot rehabilitation schemes and I hope that it will be possible to move quickly to the declaration of the first housing action areas if Parliament approves the draft Order. If we can show fairly quickly that some of these areas can be saved, it should bring encouragement to other areas and will eventually do much to restore heart to many parts of Belfast.
Part VI of the draft order provides for a new system of financial assistance to be administered by the Housing Executive to encourage the repair and improvement of existing privately-owned houses. The new system will incorporate three grants—improvement, intermediate and repair. Improvement grants will be available at the discretion of the Housing Executive for works of a high all-round standard for the improvement or conversion—including repairs—of properties with a good life ahead. Intermediate grants will generally be obtainable by owners as of right for the installation of


missing standard amenities and the execution of related repairs. Repairs grants, also available at the discretion of the Executive, will be payable towards works of repairs provided that the works are not associated with improvement or conversion.
The level of grant in each case will be fixed by reference to the "appropriate percentage" of the "eligible expense". The appropriate percentage for all three grants will be set generally at 75 per cent., while in a housing action area the Executive will have discretion to pay grants of up to 90 per cent. in cases of hardship.
The eligible expense will be the estimated cost of the works approved by the Executive subject to limits for each type of grant, and the maximum grants available will be, for improvement grant, £2,400 on works of improvement and £2,775 on conversion; for intermediate grant, £1,125; and for repairs grant, £600. Both the appropriate percentage and the limits of eligible cost may be altered by subordinate legislation.
The draft order also contains safeguards to prevent the abuse of grants and to direct grants to those in greatest need. First, all applications for improvement or intermediate grant will have to be accompanied by a certificate of owner-occupation or of availability for letting. These certificates are designed to direct grants towards those persons proposing to occupy dwellings after improvement or to keep them available as rented accommodation. The certificates will require owner-occupation or availability for letting for a period of five years from the payment of grant. In the event of a breach of this condition, the Executive will be empowered to require payment of grant with compound interest. Power will also be taken to prescribe by order grant conditions which will require to be registered.
The second safeguard excludes from grant under certain circumstances dwellings whose net annual valuation exceeds specified limits. Excluded from improvement grant are dwellings intended for owner-occupation whose NAV exceeds, in the case of improvement, £175 or, in the case of conversion, £350. I should add that the NAV limit for improvement works on a farmhouse remains at the£300

level imposed by the Housing on Farms (Northern Ireland) Act 1972. Excluded from repairs grant are all dwellings whose NAV exceeds £130 with the proviso that the grant will be available for all rent restricted property.

Rev. Ian Paisley: Has the hon. Gentleman any intention of increasing the housing on farms grant?

Mr. Carter: Not at the moment. The principle behind the order is that our resources be directed wherever possible to those areas of housing requirement that are most in need. For the moment we do not anticipate increasing the sum.
The purpose of the NAV limits is to direct assistance to those dwellings in greatest need. I do not, however, propose to introduce NAV limits for improvement grants on dwellings to be kept available for letting—I have no wish to discourage an increase in the availability of rented accommodation—or for intermediate grants which are available—like their forerunner, the standard grant—as of right.
The new grant arrangements also include provisions designed to enable improvement and intermediate grants to be paid towards works necessary to make a dwelling suitable for the welfare, accommodation and employment of disabled persons. These proposals are based on the grants which were introduced in Great Britain in 1974, but with two important differences.
The first is that, while the levels of "eligible expense" are identical, the "appropriate percentage" in Northern Ireland has been set at 75 per cent. generally with a discretion to increase up to 90 per cent. in hardship cases in housing action areas. In Great Britain the appropriate percentage is set at 50 per cent. generally, rising to 60 per cent. in general improvement areas and 75 per cent.—or in hardship cases up to 90 per cent.—in housing action areas. The second is that the repairs grant will apply throughout Northern Ireland and not just on a restricted basis in housing action and general improvement areas as in Great Britain.
The justification for these differences can be found in the Housing Condition and Household Surveys which show very clearly the alarming state of the housing


stock throughout Northern Ireland, particularly the scale of the problems of disrepair and lack of amenities in rural areas which are not amenable to treatment on an action area basis, and the fact that the people living in the worst conditions are the least able to help themselves.
While there may be a theoretical argument in favour of directing assistance to those in greatest need by some sort of means test, I am not convinced that this is a practical proposition throughout Northern Ireland. I shall, however, be keeping these grants under close scrutiny to ensure that abuses do not arise and I shall not hesitate to introduce tighter controls if they are shown to be necessary.
These new grants will provide a very valuable stimulus to house owners to improve their homes. They are essential if the housing stock in Northern Ireland is to be preserved and improved.
Part VII will give the Executive new powers to take more effective action to deal with unoccupied premises. These proposals are specially designed to deal with conditions in Belfast. Some 25,000 houses have been damaged by explosions, petrol bombs and vandals. These houses are frequently left vacant and cannot be sold or re-let; they have to be bricked up to prevent further vandalism or to protect adjoining property.
People living in the area are already uneasy about remaining there because of the disturbances and the general run-down appearance of the property. They start to leave. Often they or their landlords cannot readily sell or rent their houses and so these houses, too, become vacant, are vandalised or are used by terrorists for sniping or storing weapons. The houses are then bricked up. With quite alarming speed, an area of quite reasonable housing can decay. Hon. Members, and especially the Northern Ireland Members, will appreciate that the problem of unoccupied premises in Belfast is quite unlike that in, say, London.
Some of the measures I described earlier will help to deal with this situation particularly the housing action area approach. However, it is abundantly clear that one of the first steps in restoring confidence in these areas must be to arrest the physical decline, by securing vacant houses and by bringing houses

back into use as quickly as possible. The Housing Executive is already endeavouring to do this, but the normal processes of finding the owner of a house, negotiating a price or buying the house by compulsory purchase take far too long. This is the sort of situation in which action must be taken in days and weeks rather than months.
Part VII will, therefore, do two things. First, Article 66 will strengthen the powers which are available to ensure that, where necessary, unoccupied premises are secured or demolished. This provision gives clearer legal authority to what has in practice been happening in recent years in Belfast, relying on public health or local legislation which is not really designed for this purpose. There is a power in the article for the Executive to recover from an owner the costs of securing or demolishing his property. This will only be used where the condition of the property is due to the owner's neglect rather than to the civil disturbances.
Secondly, Articles 63 to 65 will enable the Executive to take possession of unoccupied houses. This proposal has been welcomed in Northern Ireland, but I want to explain it fully to remove any possible misunderstanding. These articles do not provide for the requisitioning of property. What they do is to enable the Executive to take over the management of an unoccupied house and to use it for meeting housing need while the normal process of acquisition proceeds. The powers will be used in the twilight areas, largely in Belfast.
I can assure hon. Members that they will not be used in respect of second homes or of houses whose owners are on holiday or in hospital. The Executive will be able to take possession of a house if the house is unoccupied or if the owner is unable or unwilling to occupy or let it, and the house can be used for housing purposes. Once the Executive has taken possession of a house, it must immediately notify the owner and it must, within a month, apply to the Department to acquire the house compulsorily. In the meantime, the Executive can repair the house and let it to a tenant of its choice. The owner is entitled to full and proper compensation, both for the period during which the Executive has possession of the house and when the house is acquired by


the Executive. Any dispute about the amount of compensation will be settled by the Lands Tribunal.
I am convinced that these powers are necessary to deal with the unique circumstances in Northern Ireland. I accept that they are unusual and would not be warranted in more normal times. I shall, therefore, be keeping a close personal eye on their administration. The provisions in Part VII will, in fact, lapse after five years unless continued by order. I give an assurance that, if a system of devolved administration has not been established in Northern Ireland within five years, Northern Ireland Members will be consulted before a decision is taken on whether to seek Parliament's approval to renew the provisions in Part VII.

Mr. Powell: May I be quite clear on that point because this is an important undertaking? I take it to mean that, although the renewal would be by statutory rule and order and although that would not be one of the small class of such orders as are "prayable", nevertheless the Government are undertaking that before making that "unprayable" order they will consult hon. Members who are interested. I apologise for intervening but it is a complex point and an important undertaking.

Mr. Carter: That is as I understand it. If I have it wrong, I shall deny it when I reply.
Part VIII of the draft order contains a number of miscellaneous amendments to the housing law in Northern Ireland. For example, Article 70 removes the somewhat outdated idea that public authority housing is intended only for "workers" and Article 73 clarifies the Executive's powers to make available rent rebates to its tenants.
This is a lengthy piece of legislation containing 80 articles and six schedules. In many respects, the provisions follow recent Great Britain legislation, but with some important differences which I have mentioned. I can assure the House that the proposals in this draft order have been widely discussed in Northern Ireland. The decision to prepare the legislation was first announced in December 1974, when my predecessor outlined

in a speech the main topics which might be covered. Since then there have been lengthy and detailed discussions with the Northern Ireland Housing Executive, the Northern Ireland Housing Council, the Northern Ireland Committee of the National Federation of Housing Associations, and many other interested bodies. The proposal for a draft order was published at the beginning of June 1976, and further comment was invited. My predecessor met many deputations to discuss housing matters related to this legislation, and he also had a lengthy discussion at the start of July with some Northern Ireland Members about these proposals.
I believe that this draft order will enable substantial progress to be made in tackling Northern Ireland's housing problems. I am convinced that the policies of encouraging greater action to improve the existing housing stock and of stimulating the voluntary housing movement are correct and are well designed to meet the special conditions in Northern Ireland. I commend the draft order to the House.

8.36 p.m.

Mr. Airey Neave: We on this side associate ourselves with what the Under-Secretary of State has said about this very important order, which is vital to Northern Ireland and implements the Housing Act 1974, which was based on a Bill, introduced by the Conservative Government, which fell in February 1974. The hon. Gentleman has explained the draft order very well. It is a complex measure and much of my speech, I am afraid, will consist of questions arising from what he has said and what appears in the order.
First, I welcome what the hon. Gentleman said about housing associations, which have not played a major role so far in Northern Ireland. They encourage one to think that they will do a great deal of good in the terrible housing problems that Northern Ireland has and which the Minister of State explained to the Northern Ireland Committee on 21st January, when we had a very full statement from him and he demonstrated the need for a new housing strategy. That was clearly needed, and we welcome it in the form of this draft order, which is


a very large piece of primary legislation, even if in the form of an order.
The hon. Gentleman is right to give attention particularly to the 450,000 houses which exist. I am glad to note the provisions relating to that point and what the hon. Gentleman said about the various parts of the draft order. Housing associations can make a valuable contribution in the problems of Northern Ireland, especially in helping to meet the needs of the disabled and the elderly. I am glad, too, that the hon. Gentleman mentioned the expansion of voluntary housing associations, because voluntary effort and initiative are needed to help resolve the housing problems. This was dealt with in the Household Survey in 1975, which I have just been reading.
That survey is useful in showing how Northern Ireland differs significantly from Great Britain in terms of social and economic structures in housing. As the survey points out, the larger average family size in Northern Ireland creates greater overcrowding. It also shows that 35 per cent. of all households in Northern Ireland live on resources below the level of their needs, compared with 21 per cent. in Great Britain in 1974. There are, therefore, significant differences.
Now I come to the questions. In another place, Lord Melchett mentioned the question of rents and the fixing of rents. As I understand it, he said that housing associations would fix rents at a level comparable with those of Housing Executive houses. This raises the question of costs. Does it mean that the Government expect to pay a higher proportion of the initial costs of housing than they do in Great Britain?
At present, in Great Britain the capital cost of a house minus the rent income for one year is written off by the Government. This is known as the housing association grant. There is a housing association grant in the draft order which amounts to a percentage of the total cost. In Great Britain, a housing association has to pay off the interest on the remaining debt plus management and maintenance, but the rent is not fixed by the rent officer at the same level as for local authority housing. It is fixed on a fair rent basis and, therefore, is normally higher.
I am not saying that that should apply in Northern Ireland. I want to know the position regarding the initial costs of houses where rents are to be fixed in relation to Housing Executive houses. I understand that they are to be fixed at a level comparable with Housing Executive houses. Will the Minister deal with that point in reply or write to me about it?
Have the Government any estimate of the number of housing units which the housing associations are expected to provide to supplement the housing stock in this way? I understand that in Britain the figure was about 15 per cent. in 1975. If the Government have plans to allocate particular sums of money to this area, they must presumably have an estimate or assumption about the future significance of housing associations in Northern Ireland. Will the Minister indicate what that might be?
Will the housing associations work in housing action areas? It was not clear from the Minister's speech whether they are to work in housing action areas.

Mr. Carter: Mr. Carter indicated assent.

Mr. Neave: The hon. Gentleman is indicating assent, so that point is met. That will obviously contribute to the emphasis on improvement. That is all I have to ask about the part of the order dealing with housing associations.
I turn now to housing action areas and grants. We welcome the declaration on housing action areas, particularly in Belfast, where there is an urgent problem of unfit property, especially in the privately-rented sector. We also welcome the higher rate of grant for the renovation of homes in Northern Ireland from 75 per cent. to 90 per cent., compared with what obtains in Great Britain, and the application of the repair grant not only to Belfast but to the whole of Northern Ireland. Poor housing is a Province-wide problem. Therefore, the repair grant should be available throughout the whole of Northern Ireland.
Regarding improvement grants in general in Part VI of the order, will the Minister indicate the amount of take-up? Two years ago the Minister of State announced his intention to initiate what he called a new publicity drive on the availability of improvement and conversion


grants, which were then being taken up at the rate of only 2,500 a year. Has that situation changed? Has the publicity drive been effective? I note that in Great Britain the take-up of improvement grants dropped by about 60 per cent. between 1973 and 1975. Is the hon. Gentleman satisfied that the proposals for Northern Ireland are adequately designed to prevent such a situation occurring in the Province? Perhaps he will deal with that matter when he replies.
Does the Minister agree that, if these new grants are to be effective in stimulating action in the privately-rented sector, they must be accompanied by action to deal with what in August last year, when commenting on the findings of the Porter Committee, he referred to as a vicious circle of low rents and lack of repair and maintenance?

The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): The Minister of State, Northern Ireland Office (Mr. J. D. Concannon) indicated assent.

Mr. Neave: The hon. Gentleman agrees. I remember his words quite well. We welcome the Government's announcement on 21st October regarding proposals to alleviate problems in the privately-rented sector by decontrolling rents and providing a fair rent system. I understand that 75 per cent. of houses in this sector have rents of less than £1. This is unrealistic. If the proposals in the order are implemented—I hope that they will be brought in with the utmost urgency—will the privately-rented sector be in a position to provide a valuable second force in dealing with housing needs?
The Minister made a number of interesting remarks about the powers of compulsory acquisition contained in the order. We accept the necessity for these powers in a serious emergency, but the hon. Gentleman will agree that every step must be taken to protect the rights of owners.
The Minister referred to the five years during which this part of the order will remain in force. What will happen at the end of the five years? Will the houses remain in public ownership or will they be returned to their original owners? We need more information about this.
How many houses are likely to be acquired in this way? May we have an estimate of the cost of acquisition? It is important to have a basis on which to assess this operation. On what basis will compensation to owners be calculated? Will it be the original cost and value of a house, were the area not affected by violence, or its market value as a derelict property?
All these questions need answers, but I congratulate the Under-Secretary on his introduction of an order which we welcome.

8.47 p.m.

Mr. James Molyneaux: My hon. Friends and I join in the tribute paid to the Under-Secretary's predecessor, the present Minister of State, whom we are pleased to see on the Front Bench. Although he is not directly involved in our deliberations, we appreciate the fact that he has taken the trouble to be here for the debate.
It must be admitted that progress with the housing associations has not been as great as one might have hoped. Indeed, it has been disappointing and we should like to know whether the order will do anything to improve the situation. Will it supply whatever has been lacking or remove any obstacles which may have existed?
My impression is that relations between the Housing Executive and the associations were formerly not as good as they might have been and we owe a deep debt of gratitude to the present Under-Secretary. Since he took office—and I am not saying that there was negligence by his predecessor—there has been an improvement in the liaison and relationship between these bodies. I hope that this not only continues but improves.
Areas of friction and rivalry may recur and, indeed, may not have disappeared in all cases. For instance, I was asked recently whether the Executive had given instructions to its staff not to seek a transfer to a housing association. I do not state this as an accusation, but it is a rumour which has got around. If it is incorrect, I hope that the Minister will scotch it.
Has there been any delay in arriving at decisions as to where the borderline of responsibility is drawn between the


fairly limited operations of the housing associations and Big Brother, the Housing Executive? This applies particularly to the rehabilitation of existing houses, where progress is highly desirable.
In Parts II, III and IV of the order the housing associations' relationship to the Department of the Environment is set out very clearly, but perhaps there is a good reason for the relationship between the Department and the housing associations and the relationship between the Housing Executive and the associations not being defined quite as clearly. I hope that in the coming days the Minister will encourage the larger associations as they come into being and find their feet to tackle perhaps fairly major and ambitious schemes and not to confine themselves merely to consideration of more minor activities.
We welcome the trend expressed in various parts of the order, and clearly expressed in the Minister's speech, in relation to the need for the rehabilitation of existing houses. At a time of national financial stringency, we feel it highly desirable that economy should be a very significant consideration. A sub-standard home can very often be made habitable and comfortable by fairly modest expenditure. If expenditure can be restrained, it follows that the inevitable rent increase can also be kept to a reasonable level. This is very important, particularly for elderly persons.
The Minister has outlined and restated the schemes for rent rebate. My colleagues and I at diverse times have also tried to make known to our constituents the availability of this concession, but again one must admit that it is not always taken up and fully used as it ought to be.
The business of providing relatively economic accommodation for elderly people is vital on two grounds. First, a great many of them have no particular desire to move to an entirely new locality and into glass-walled housing and so on. They would far rather finish their days in their own locality with the friends and neighbours with whom they have lived most of their lives. Secondly, their income is often insufficient to meet the costs of the rent charged for the new housing, and it is often not quite sufficient, either, to keep up with the relatively high costs of

running houses sometimes of very faulty design.
I should like to give an illustration of that. A Housing Executive estate in my constituency, in the town of Antrim, had—and still has—what was meant to be a very sophisticated type of electric central heating. It was some kind of blower device. In this type of house, the blower was situated on the bottom flight of the stairway that came down to the back door, and there was a very obliging gap of about an inch between the doorstep and the back door. This had the beneficial effect that in snowy weather snow never laid on the doorstep. However, it did not commend itself very much to the unfortunate tenant who had to foot the bill, which was quite an exorbitant amount, and who derived very little benefit—except perhaps by having his doorstep and lawn free of frost and snow.
Modern architects are not infallible. My right hon. Friend the Member for Down, South (Mr. Powell) and I were sitting at Heathrow Airport on one occasion shut in by glass plate. He made the comment that the mediæval architects knew their jobs far better than modern architects because they got the relationship of walls to glass correct.
That could apply equally well to houses, because in these glass palaces it is not uncommon for the temperature to rise or fall depending on whether the sun is shining or has gone behind the clouds. Some of these architects ought to be grasped firmly by the ankles and brought down to earth with a bump. We must seriously consider all possible means of providing houses at prices that we can afford. I say "we". I mean all of us—taxpayers, ratepayers, tenants—who are responsible for advocating, as we do on this Bench, the control and reduction of Government expenditure.
We welcome the more realistic approach to private landlords which is reflected in the order and in the speech of the Minister. Indeed, it was evident in the thinking of the hon. Gentleman's predecessor. It is a line of thinking which has become more and more apparent on this side of the water. In tonight's Evening Standard there is a good article on this very topic.
The other day Councillor William Bell, a close associate of my hon. Friend the


Member for Belfast, North (Mr. Carson), who has taken a special interest in this aspect of housing, said:
These improved grants would not only aid landlords to bring dwellings up to standard despite the low remuneration from fixed rent levels, but would also radically improve conditions for tenants and especially the high percentage of elderly people in this category.
That is a view that one hopes will prevail in Northern Ireland.
At present some strange contradictions exist even within the structure of the Housing Executive itself. I think the Minister and his predecessor to their cost will identify the problem that I shall briefly give as an example. It concerns the town of Ballyclare in my constituency.
The district office of the Housing Executive in that town is doing its best to provide accommodation for young married couples. So far it has not been particularly successful because of the length of the waiting list. Many of those young couples, some with families, have been forced to live with their in-laws. Others have had to seek accommodation in remoter areas and to commute back to their home towns where they are employed.
I have every sympathy with the district office staff. They have been helpful to me on many occasions. But now their problems will be vastly increased by the action of another branch of the same Northern Ireland Housing Executive, which is in the process of condemning about a dozen houses known as Wilson's Row.
That branch of the Executive approaches the tenants saying "These are not particularly good houses. Would you like to live in a nice brand new shining house?". Half of those tenants, with that carrot dangled in front of them, said that they would think about it, but the other half firmly said that they did not want to leave. The position is that the two branches of the Housing Executive will contrive to add a dozen more names to an already lengthy waiting list. What is more they will give an added priority to those people who have been made homeless by their own actions. Those people will receive a higher priority than people desperately in need of houses but whose points will not match up to

those tenants who have been displaced by the action of the Executive itself.
In fairness to those displaced tenants I should say that this is a degree of priority that they do not seek. Is it not possible for the Government to persuade the Housing Executive to make sure that spare capacity exists in all these areas to provide accommodation for those whom it displaces before it condemns or demolishes existing houses?
We welcome also the indications of a shift towards the repair and restoration of existing properties as opposed to the creation of vast new housing estates, which have proved social disasters. I hope that this thinking will influence the inquiry which began today on the proposed Poleglass development.
In case any hon. Member thinks that I am being gloomy, let me offer him this glossy booklet produced three years ago describing all the joys of moving to the new community at Twinbrook, which is also in my constituency. The hon. Member for Belfast, West (Mr. Fitt) will agree that this is not a political or sectarian point. That estate was designed as an integrated estate—in other words, a person's religion would not be taken into consideration and people of different religions and political outlook would be encouraged to live and work together. As their Member of Parliament, I fully subscribed to that objective and did what little I could to assist.
But I doubt whether anyone on that estate is not now compelled in some way to co-operate with the Provisional IRA. That is a very sad picture and exactly the same will happen if the Government allow the Housing Executive to proceed with what it now proposes at Poleglass.
I do not wish to labour the point but it has been said that within the boundaries of Belfast there is, although not a great deal of space, certainly sufficient to house many of the people who urgently need accommodation. On one occasion, the hon. Member for Belfast, West agreed with me that such space existed within his constituency and within the city generally.
I am hoping that the Minister, who takes a keen interest in all these affairs will examine the possibility of using the relatively small areas in west Belfast for


building new houses and that he will press on with his declared intention of restoring and rehabilitating existing houses, thus avoiding the development of huge housing estates anywhere outside the city boundary—I am not just thinking of Twinbrook and Poleglass.
I have had experience of the community to the north tof the city called Rathcoole. It is much older than Twin-brook but it has taken years for those people to put down roots and develop any community spirit. Speaking now of people on the other side of the fence, I would say that some of those who have muscled in on the control of the amenities on that estate are no great credit to the people of Ulster.
May we be assured that the scrutiny of expenditure to avoid waste will be applied to the workings and the administration of the Housing Executive itself? It has been the experience of all hon. Members that empires of that kind are difficult to control or supervise. While we are very grateful to the Minister and his predecessor for ensuring that the housing programme in Northern Ireland will escape most of the savage cuts being made elsewhere, we wonder whether some of the newly created and highly paid posts in the Housing Executive are necessary at this time.
Finally, as we give our support to the order we hope that there will be more co-operation among the authorities responsible for housing. If I wanted to be naughty I might add that we hope for more co-operation among the various formations and elements within the Housing Executive. I trust that everything will be done to ensure that money is well spent and that those concerned will bear in mind the need for economy in design, construction and running costs of new and improved houses.

9.6 p.m.

Mr. Gerard Fitt: Legislation such as this, designed to build up the housing stock in Northern Ireland, must be welcomed. However, I have reservations about one or two points in the order.
I have been in politics for a number of years in Northern Ireland both at local and central Government level at

Stormont and as a representative in this House. I have never been aware to any great extent of the rôle played by housing associations prior to the reformation of local government and the creation of the Northern Ireland Housing Executive. Most of the housing in Northern Ireland is run by local authorities and the Belfast Corporation.
How many housing associations are there in Northern Ireland at present? It may be interesting to find out who are the people involved in them. I remember some years ago in the Stormont Parliament questioning the bona fides of a person who was a member of a housing association and yet seemed to be in collision with the Belfast Corporation, as it then was, in its attempt to buy land at Knocknagoney on which to create a Belfast Corporation housing estate. There seemed to be a conflict of interest brought about by the price of the land. The corporation was being asked to pay what was regarded as an outlandish price for the land, which was being sold by a member of a housing association. In giving our support to housing associations we must at all times be aware of the personnel involved. We must be convinced that they are anxious from the social standpoint to try to create houses.
Will housing associations make a profit? The order does not make it clear. Local authorities make no profit, and the Housing Executive has not been making a profit. [Interruption.] There is no guarantee that the housing associations will not have to put up with the same builders as have been operating with the Housing Executive. If housing associations are to make a profit, will that be their function alongside the provision of homes? If profit is a motivating factor, I cannot see them opening up their big hearts to the people who will need homes.
An old couple who lived in a rented house paid their rent religiously every week to the estate agent. Fortunately, the husband was able to keep the house in good condition. Then the owner, through the agent, sold the house to a housing association. The first thing the tenant knew about that was when he received a notice from the new owners to the effect that as they now owned his house they would increase his rent. He told the housing association that he had


signed an agreement with the agent, paid his rent every week and carried out his own repairs. He asked why the housing association should increase his rent by £1·50 per week.
I met the Minister of State about the case, and many figures were produced to justify the rent increase. It was said that the housing association owned a lot of bad property in Belfast on which it had to carry out repairs and, as a result, had a deficit in the accounts which justified an increase in the rents of all the houses it owned. That seems a little unfair. The tenant was not told that his house was being acquired. Then he was asked to pay a rent increase on his home, which was in good condition, because the housing association owned bad houses. That tenant was one year off retirement. He might have been able to afford a higher rent in his younger days, but it seems unfair to charge him a higher rent on the eve of his retirement.
The hon. Member for Antrim, South (Mr. Molyneaux) said that Twinbrook was originally planned as an integrated estate to house people of all religions and none, but so also was Rathcoole. People of all religions lived happily there until the outbreak of the troubles five or six years ago. Now it is almost totally a one-religion estate. The Roman Catholics had to leave the estate just as the Protestants had to leave Twinbrook. It is a sad commentary on Northern Ireland when we have to talk about religion in the context of the provision of housing.
On the Shankill Road and the Falls, in North Belfast, and New Lodge Road—which is represented by the hon. Member for Antrim North (Rev. Ian Paisley)—there are numerous housing action associations. I do not know how legitimate they are and what their function is supposed to be, but crossing the political and religious divide from Westland Road to New Lodge Road, to the Falls and Shankill Road, strange personnel can be found dictating to the Housing Executive who shall and shall not get a house and who shall be evicted. I have always been opposed to the Housing Executive talking to such groups. In all the associations, right across the religious divide, people are telling the Housing Executive what it should and should

not do. When they had the temerity to fight a local government election, they lost their deposits. However, the Executive is still talking to them.
The order provides that there shall be housing action areas. The association personnel may well think that that terminology gives them justification for saying "We are a housing action group and this is a housing action area. Therefore, we are the people who must be consulted." I urge the Minister, who has only recently taken up his appointment, to be wary of the different organisations which claim to be the voice of the ordinary people when it comes to discussing housing.
This is not a party-political point of view. This is a matter that affects all of us, particularly in Belfast, where elected representatives are being usurped by those who could not win an election. They are dictating what the Housing Executive should do in certain areas.
The hon. Member for Antrim, South mentioned the Poleglass scheme. Perhaps the best place to make known our sentiments is at a public inquiry. Should there be a reduced number of houses built there or should the number be increased? The houses have not been built so far, but there is a real need for houses to be built adjacent to the west Belfast area. I fully support what the hon. Gentleman said, but it is my information that there is still a certain amount of ground available in the West Belfast area which should be used for housing. I believe that the Housing Executive and the Minister would justify their case to a far greater extent as regards the Poleglass scheme if they built on any available ground. They would then be able to justify, if the figures so suggested, a further extension of the Poleglass development scheme.
I know that in West Belfast it is not only the Catholic areas that need to be redeveloped and declared. There are many areas with that need in the Shankill Road area and in North Belfast. If my party and I have any influence to bring to bear, I hope that we can make Poleglass an integrated estate. I co not want to see it develop in the manner of the other estates I have mentioned, which would mean that it would be under the


control of one or other of the paramilitary organisations that we have in such abundance in Northern Ireland.
I welcome the order. I believe it is necessary to try to quicken the provision of more houses in Northern Ireland. If it gives some impetus to housing associations, I hope that it will not be to the extent that people are forced to the conclusion that the task is far too large for the Housing Executive so it must therefore be unloaded on to the housing associations.
Although it has its imperfections, I believe that the Executive has a necessary and worthwhile job to do, not only in Belfast but throughout Northern Ireland. I would rather have the Executive, given its imperfections, because it is answerable to us as elected representatives. The housing associations often have questionable motives or personnel. Will the Minister tell the House how many housing associations there are in Northern Ireland, what are their bona fides, and who are the personnel who control them?

9.20 p.m.

Mr. John Carson: I wish to associate myself with the remarks of the Under-Secretary of State for Northern Ireland and I join with my hon. Friend the Member for Antrim, South (Mr. Molyneaux) in congratulating the Minister of State, Northern Ireland Office, the hon. Member for Mansfield (Mr. Concannon) on the pioneer work he put into this order. The hon. Member for Belfast, West (Mr. Fitt) and I represent the worst housing areas in Northern Ireland—possibly in the whole of the United Kingdom. Therefore, we appreciate the Minister's efforts in trying to provide the best possible houses for the people of Northern Ireland.
I am delighted to see in the Chamber the former Secretary of State for Northern Ireland, the present Home Secretary, and also his former Minister of State, the present Minister for Social Security. It shows that they still display an interest in Northern Irish affairs.
The housing grants covered by the order will go a long way to alleviate some of the problems in Northern Ireland, especially those faced by young married couples. On numerous occasions representations have been made to hon.

Members in the area on behalf of these young people, and it is always said that they have a good chance of obtaining housing accommodation. However, I believe that the contrary is the case and that young married couples in my constituency have to be married a very long time before they are considered by the Housing Executive. Therefore, the 75 per cent. grant—or the 90 per cent. grant in housing action areas—will go a long way to help young married couples who wish to take over houses in a bad state of repair and spend money on them to make them habitable.
I was also pleased to learn that these provisions will assist the older generation. People who have spent 40 or 50 years in a house think twice before leaving. However, they fear that in future they will not be able to meet the rising costs in any new housing to which they may move.
My hon. Friend the Member for Antrim, South has already mentioned the cost of heating in some new homes. An old lady constituent of mine recently moved from her small comfortable parlour house into a new house on the outskirts of Belfast and, because of the high cost of the electricity, she was forced to ask her son to disconnect the heating system, for she could not meet the electric lighting bill.
She was not like many other people in Northern Ireland who are determined to destroy its economy and to take everything they can get with nothing in return. She was an old lady of the old stock—and we should like to have more of her kind in Northern Ireland—who like to pay their bills and pay their way in life. However, she was forced to have her electricity cut off because she could not afford to pay for that heating supply as well as for her food and other essentials. I am pleased that the 75 per cent. grant will also assist other old people who find themselves in difficulties.
I wish to question the Minister about abuses of the grant system because he said that the situation would be taken care of. If a private landlord carries out renovations to a house and receives a grant, whether it be 75 per cent. or 90 per cent., will he be able to let the house for at least five years?
The landlord may well ask what grant he would be able to receive for that


house. Will he be able to charge the same rent as the Housing Executive and the housing assocations, and will he be able to charge for repairs? Even after repairs have been carried out, essential amenities installed in the house and he has received the grant, he has to undertake maintenance.
This is a problem facing every private landlord throughout Northern Ireland. The Minister of State has said that some rents received by private landlords in Northern Ireland were not enough to buy a packet of cigarettes, and that is certainly still the case. Carrying out repairs over the next five years to the houses which will affect these grants will cost the landlords quite a lot of money. Would the Minister give an assurance that the landlord will be able to charge rents equivalent to those charged by the Housing Executive or housing associations?
Everyone from Northern Ireland welcomes the schemes for the rehabilitation of old houses. But over the past two or three years we have had the Housing Executive closing down houses and then blocking them up. When the Executive is asked when it hopes to start rebuilding and providing homes for people, it cannot give an answer. It could be as long as two years. In my constituency there are many thousands of houses which have been blocked up in redevelopment areas, and the Housing Executive cannot say when the people will be rehoused, or even when the houses will be knocked down and new ones built. This is forcing people to leave these areas. When the Housing Executive says that it will take over an area for redevelopment in the future, decent tenants start moving out and then many houses are blocked up.
We welcome the rehabilitation of old houses but there are some problems created such as the one in my constituency. An area of north Belfast comes under redevelopment area No. 7, some of which is included in a rehabilitation scheme. Just two weeks ago the Housing Executive, in one of the daftest actions I have seen, blocked up a house which had all the basic amenities—bathroom and toilet facilities, hot and cold water.
One of my constituents went to the Housing Executive office in the area and said he would be willing to rent that

house rather than move to the outskirts of Belfast where he would face high costs of transportation in travelling to work. He wanted to sign for the house and move into it until the Executive took over. He was told immediately that the house was to be blocked up even though it had all the basic amenities. After two weeks, the Housing Executive came and blocked up the house, and the contractors removed the whole bathroom suite. No one knows where it went: it was not taken into the Executive's stock—I know because I made inquiries. I hope that if the housing association proceed with the rehabilitation schemes they will do so more effectively and on a more businesslike basis than did the Housing Executive. I hope that they will see that every house is properly looked after.
I am delighted that the housing associations are to make provision for elderly people. These people have been neglected throughout Northern Ireland and, I believe, the United Kingdom, too. We can never do enough to help the elderly. I visit many of them in my constituency. They live in terrible conditions, and often when I leave them I wonder how they will survive the winter months.
I would also welcome help from the associations for the handicapped. One family in my constituency—just one of many such families in Northern Ireland—have two children who are completely handicapped, a boy of 13 and a girl of 16. The Housing Executive refused the father permission to drive his car, which was necessary for getting the children about, alongside the house because that would have involved making a hole in the hedge and crossing a footpath. After making certain representations we secured that permission for them.
But we have not secured permission for basic changes to be made in the houses of other handicapped people, for example, to enable them to move their wheelchairs around and to make things easier for them in their bathrooms. I hope that the housing associations will press ahead with many homes for the handicapped and will help with the work that is already being carried out by parents and others responsible for handicapped children.
Is Article 14 sufficiently wide to control housing associations and to clarify their legal position? I fear that we could be


opening the gate to something similar to what happened with the Housing Executive when it had a rehabilitation scheme which involved handing out work to certain building contractors in West Belfast. I need not elaborate on that this evening. Certain of my hon. Friends, including my hon. Friend the Member for Antrim, North (Rev. Ian Paisley) brought this matter to the attention of the House almost a year ago and highlighted some of the things which were being done under this contract. This matter is now being investigated by the police and I hope that it will be dealt with in the proper way. I hope that we are not opening the gate to something similar with the housing associations.
I am sorry that the hon. Member for Belfast, West has left the Chamber. He said that in certain areas of Belfast there were action groups, that there would be housing action areas, and that housing associations would be set up. A leaflet I have asked whether anyone can form a housing association. It says "The answer is Yes". I know that the Minister realises that many people in Northern Ireland are determined not only to bomb and kill but to destroy the Northern Ireland economy as part of the United Kingdom economy. These people will stop at nothing. They will even try to infiltrate housing associations and eventually to take them over. The grants those associations would receive from public funds would not go towards the good of Northern Ireland or towards the good of the people the associations are supposed to help. We must guard against those people who will try to take over housing associations, because that will not be for the good of the Northern Ireland people.
On Part VII the Minister said that there were 25,000 unoccupied houses in Northern Ireland. Almost half of those must be in my constituency. These houses have been blocked up. Immediately a house becomes vacant, vandals move in. Terrible vandalism occurs in every part of Belfast. Vandals remove a layer of the roof, take away copper cylinders and water tanks and the water pours into the house. If there is a decent house next door, it suffers damn as a result, which forces good tenants out. To block up such houses costs a lot of

money. I have heard estimates from contractors ranging from £100 to £300, depending on labour, the length of contract and how the contractor feels. The Minister must take note of this situation.
I know of a number of houses that have been vandalised beyond repair and it would be the height of foolishness for the Housing Executive to block them up. They should be demolished. It would be cheaper to knock them down.
Many such houses are a health hazard. People dump rubbish in them and there have been complaints about the possibilities of disease. People living in such an area worry about rat-infested houses and the rubbish which is dumped over garden walls. Unoccupied houses which are beyond repair and rehabilitation should be demolished. With those comments I welcome the order.

9.38 p.m.

Rev. Ian Paisley: The order is important. Once again, as representatives of the Northern Ireland people, we feel that this type of legislation should come before the House as a Bill so that hon. Members from Northern Ireland may have the opportunity not only for a full parliamentary debate but to move amendments to improve the legislation.
We know that all sorts of representations are made about parliamentary time, and we are all aware of the great pressures under which the Government are operating because of the actions of another place. We know that all of us will probably have to be here at strange hours to debate coming legislation before the Session ends. But as the debate before this one did not continue as long as it could have done, we are at least able to discuss Northern Ireland business before midnight, and for that we are deeply thankful. We trust that on similar occasions in the future the Whips will so arrange matters that the business which is to be taken before orders relating to Northern Ireland finishes early, giving us more time to debate these important matters.
There are 80 articles and six schedules in the order. I do not know how any legislative assembly in the world could adequately digest all of them in the time left to us. I know that, because


of what happened earlier, we will have a little longer in which to debate this issue. If the preceding business had not fallen, we would have had only two and a half hours. The Under-Secretary has an important part to play tonight. He has been asked a number of questions, and no doubt he will do his best to reply to them. I see the Minister of State sitting beside him. He was really the father, if I may put it that way, of the order. I do not know whether the Housing Executive was the mother, but the hon. Gentleman was certainly its father. We appreciate all that he did.
The Minister of State has listened to many deputations. He must have been wearied listening to the story being told and retold. The story of housing in every constituency in Northern Ireland is almost identical. The names of the streets and the estates are different but the same conditions, alas, prevail. I am glad that the hon. Member for Belfast, West (Mr. Fitt) made it clear that bad housing—houses that are unfit and need urgent repairs—exists on both sides of the religious divide.
When I first came to this House, it was common to hear it said that while there were certain areas of bad housing in Northern Ireland there was good housing in the Protestant majority areas. In the heart of Protestant Sandy Row and in the depths of the Roman Catholic Falls Road, there is housing equally as bad, and I am glad that the House has learned this. It is essential that the people of Northern Ireland should have the opportunity to remedy that situation. Over 40 per cent. of the housing stock is substandard. Many houses are not fit for human habitation.
Perhaps the Minister will spell out the criteria he will be using for the definition of housing action areas. Who will make representations to him? Will representations be made by the people the hon. Member for Belfast, West told us about—self-appointed persons who feel that there is something in these housing associations and housing action groups that they can exploit for political and other advantages? Will the Minister deal only with the city of Belfast, or will he come into the rural districts?
I am reminded of the terrible state of affairs in my constituency, where 27·5 per cent. of the houses are unfit for habi-

tation or are below standard. Yet North and South Antrim are looked upon as being the most prosperous part of Northern Ireland. I say that with respect to my right hon. Friend the Member for Down, South (Mr. Powell).
Unfortunately, the voice of Fermanagh is seldom if ever heard in this place. It is only right that we should stress tonight the terrible situation existing in Fermanagh. I believe that 40 per cent. of the houses there are unfit or below standard. We have a serious situation in the rural districts. We want the Minister to spell out the criteria to be used and how he is to proceed in the housing action areas, and also to tell us whom he is consulting. This matter is of vital importance to every Member from Northern Ireland.
As I have said, much of the present housing stock is below standard. Some effort must be made to bring it up to standard. Then there are the houses which have been forsaken, which were good houses and have now been vandalised. As a result, they have been bricked up. Then there is the de-bricking process, which has been very expensive. Houses which cost £300 to brick-up have cost £10,000 to de-brick in Belfast, and figures of £7,000 and £8,000 have also been quoted.
I am glad that the Fraud Squad is looking into allegations made in this House—allegations which were denied, especially by the former Leader of the Liberal Party, who suggested, because I mentioned these matters in Committee, that some sort of police action should be taken against me for daring to leak the vital information that the IRA was gaining ground through these large handouts. A member of the brigade staff of the IRA, Sheamus Loughran, was managing director of one of the firms concerned and he was getting about £7,000 or £8,000 for de-bricking a house. The cost of the material came on top of that. Therefore, houses built for £5,000 were costing perhaps £20,000 to £25,000 to put them in a proper state of repair. It is a sad and depressing story.
It should be added also that when the hon. Member for Birmingham, Edgbaston (Mrs. Knight) made certain allegations, the former Secretary of State for Northern Ireland shot them down in what


was perhaps a rather discourteous manner. But the truth is now coming out. The truth will always out.
In the Northern Ireland Committee last January, my hon. Friend the Member for Armagh (Mr. McCusker) pointed out some of the serious things about the housing in his area—and I remind the House that this sort of thing can happen in both Roman Catholic and Protestant estates. In Rathcoole the Roman Catholics were driven out, or it was made impossible for them to live their lives there; in Twinbrook the Protestant people were driven out, or it was made impossible for them to live there. We all know what is happening in Stewartstown Road at the moment. This is a terrible situation but it is the reality that we have to face.
My hon. Friend the Member for Armagh told the Committee:
In my area, there are 500 empty houses. In Churchill Park, there are 145 vacant dwellings; in Obins Drive and Obins Avenue, there are 18 vacant dwellings; in Lurgan Tarry, there are 11 vacant dwellings; and in Ennis Close, there are 81. In Rathmore, 168 dwellings are vacant; in Meadowbrook, 18; in Drumbeg, 43; and in Wakehurst 11. The Under-Secretary knows why those dwellings are vacant. They are in notorious Republican areas. The murder of policemen and soldiers and petrol bombing—including one last week above Churchill Park—have driven out the Protestant community. There is no way in which I can convince people to go back to that area and live together. The only hope of sanity is integrated housing. There are 500 houses which are available only to one section of the community."—[Official Report, Northern Ireland Committee, 22nd January 1976; c. 68.]
Those houses should be occupied. I should be in favour of their occupation even by one section only of the community. But not one house has been built by the Housing Executive for the Protestants who were driven out of those areas. That could be argued in reverse for the Roman Catholics who have been driven out. We are very concerned about this matter. The Minister must look at this terrible problem.
I do not know whether the Minister got the full strength of the point made by my hon. Friend the Member for Antrim, South (Mr. Molyneaux). There is a conflict of interests within the Housing Executive because it administers the closing orders. Indeed, the closing orders are administered in very strange ways.
Some houses in my area are not fit for human habitation. I am not blaming the Housing Executive for that situation. The houses are the heritage of the old rural district councils—the Ballycastle Rural District Council, the Ballymoney Rural District Council and the Ballymena Rural District Council. Those three councils do not have a very good housing record. I am being charitable when I say that.
There are houses in those areas with no amenities: no lavatories, water or sewerage. When any electric wiring took place, those councils said to the tenants "As we have wired your houses, we shall add a charge to your rent." Even if the houses had three different tenants, they still paid the charge. That is why there is an uneven rent structure in North Antrim. One person living in a house might pay £2·50 rent whereas others in similar houses might pay £2·75. That system goes back to the old heritage.
Recently, one of my constituents said to me "Under the old council I needed a new fireplace. When it was put in, 5s. was added to my rent. That fireplace was installed 20 years ago. I have asked the Housing Executive for a new fireplace and have been told that I can have one, but I shall still have to continue to pay the extra 5s. which I have been paying all these years." These are some of the things that the Housing Executive is up against. People do not understand why a house should cost more because in the past electric lighting was installed by the council.
I have no time for such councils and the way they act. They have gone now. Some of them felt that they should not be called into question. When I was first elected to Stormont and raised this matter, one of the councils immediately called a special meeting and passed a resolution not to answer any letters from me about the houses in its area. That was what we were up against. That was not even under direct rule.
I am perplexed by the actions of the Housing Executive. In Duke Street, Ballymena, houses were bought by certain people and grants were given for improvements to be carried out. Now, the Housing Executive feels that all the houses should be closed. It asks tenants whether they would like to go to a new house with much better facilities, a house which


is off the road and which has a garden for the children. The Executive tells the tenants that they will be far happier in the new property. Before they have had time to consider it properly, they consent and the Executive puts them on the emergency list and slaps closing orders on their houses.
Those who advise me on legal matters say that, as the law stands, there is no way of lifting an order. It is on for good. This is a serious matter. The Minister should take these points on board and consider them carefully.
The Housing Executive does not slap orders on its own terrible, hopeless houses which have no water, sewers or other facilities. I took the housing manager in my area and showed him a woman's home with no facilities. When I asked why he did not put a closing order on the property, he said that it belonged to the Executive. Yet if I were the owner of that house a closing order would be served. There is a conflict of interest here.
The Minister must find a way of preventing the Executive from having these two jobs. It cannot have the arbitrary power to close houses when it does not close its own properties which, if the same criteria were applied, should be the subject of closing orders.
I am glad that the Minister and his Department will be the bosses in the acquisition of land. I know that the housing associations have been kicking against the pricks, but I should be worried if they were given this power. I congratulate the Minister on keeping control in his own strong hands.
The associations can request the Minister to acquire land compulsorily and vest it in them. There is a strange anomaly in the provisions relating to vesting in Northern Ireland. If a Government Department vests land for a specific purpose and does not go ahead with the scheme, the original owner has no way in law to make the Department hand back the land. A Department may want land for housing, a school or a road. Land was acquired in Ballymena for the purpose of building a road, and the owner opposed the proposal. The only appeal in regard to money in these cases is to the Lands Tribunal. If an appellant wins his case, his expenses are guaranteed. If he loses,

he loses everything and has to pay all the costs. It was eventually decided not to built the road in Ballymena. It was decided that there would be a change. The man concerned would like his ground back again. The Ministry admits that no road will be put there. However, that man cannot force the Minister on this. If the Ministry, in its good grace, says "Yes, we shall negotiate and resell the land to you", of course it must now be sold at today's price. Therefore, the man has lost his land. He did not want to lose it. His ownership was called into question by the Government, and they took the land. Having taken it and not used it for the stated purpose—the land could not be purchased without that being spelt out—they have let it lie fallow, and the Minister has no power to force the Department or the Government on the matter.
I should like an assurance that the Minister will look into this matter and safeguard the rights of owners. If an association takes land and does not go ahead and build on it, surely the owner is entitled to have it back again.
I never advise constituents of mine to go the Land Tribunal, because of the way in which it is set up and the compensation that is offered for property. Even when a man goes to the Tribunal, he is likely to fail. If he fails, he loses everything. That is not a fair redress for a person in such a position.
I am very sad that the Minister will not look more favourably on the farming community. Agriculture is the basic industry in Northern Ireland. We have had a serious move away from the land. It has not been helpful. More and more people will have to go back to the land. Increasingly, the position of the farming community will have to be borne in mind. When all other parts of the community are to get help, I do not see why the farming grant is not to be increased at all. The agricultural community will think that very strange indeed. After all, people are employed on the farms, and if their houses fall into disrepair there could be a drift away from agriculture again and a loss of employment.
In the past week in Northern Ireland, factories have closed. That brings sorrow to all of us. The queue of the unemployed has swollen. One factory made prefabricated houses. I should like the


Minister to tell us something about its closure. It would seem that houses are needed in Northern Ireland. However, we suddenly hear that a factory that is making houses is to close. On the face of it that does not seem right.
I do not think that the Housing Executive has been very helpful by its statement. It simply said that houses must be up to a standard. That was as much as saying that the factory concerned could not make houses to the Housing Executive's standard and that, therefore, it would have to close. That is what I assume from the statement, although that may not be so. I see that the Minister does not agree. However, perhaps he could explain this and tell us how many houses the Housing Executive completed three years, two years and one year ago and how many it will complete this year. We need to know how the Housing Executive is getting on with its building programme. I think that there has been a fall in the number of houses that it has been completing.
Everyone who is prepared to put money into housing in Northern Ireland should be encouraged. If the public purse is not able to supply the wherewithal, those who want to build their own houses will have to be encouraged. In the debate in another place, the Minister said that the needs of Northern Ireland's housing would have to be specially tailor-made to meet the situation in Northern Ireland.
Planning will have to be looked at again. It is very sad that planners seek to destroy the small hamlets in Northern Ireland. I am very much opposed to that. We have been told tonight about the jungle of the vast housing estates on the perimeter of Belfast. It would be far better for people who have been brought up in the community, and who are already integrated into it, to be able to build in that community and continue to reside there.
I thought that when the rural planning proposals had been made—I understood that this was the objective—there would be some easing when people applied for planning permission. I have to attend many planning appeals and fight the cases of my constituents at those appeals, but the planning officer seems to think that his role is to keep everyone in a particu-

lar area. All sorts of area plans are floating around, and these proposals have now almost become the law of the Medes and Persians. Immediately a case comes up for appeal, the planning officer says, "These are our proposals and you cannot build outside this area". The officers have no statutory powers, and their maps are only proposals for discussion.
In Ballymena there are people who want to build houses and replace old ones. I had one planning appeal at Ballycastle. The hon. Member for Belfast, West enjoys the sweet air of the glens of Antrim and he knows Bally-castle. In fact, we are told that he often plays a mouth organ in the glens. I do not know whether the hon. Gentleman has ever played "The Sash", but that is hardly something for this debate.
However, I recently attended an appeal in Ballycastle concerning a farm house which had not been lived in and was disused. A man who was brought up in the area wanted to replace that house and build a new one on the site. We know that a directive has gone out and that a house must have four substantial walls and a roof, and if it can be proved that it was lived in within the past five years it will be considered as a dwelling. This particular farm house had not been lived in for some time, and there was a hole in the old-fashioned chimney breast which had been built outside. The planning officer said that because of the hole and the state of the house he did not recognise it as a house, and he would not give planning permission. I asked him "Is it not a nice home?" He replied "It is not nice". I asked "If a new house was built, would it not be a nice home?" He said "We would prefer nature finally to demolish that building rather than have a new house built there."
How does a young man, who wants to put his money into that kind of house and bring his bride to it, feel when he walks out of a planning inquiry? There is an appeal system, and I am thankful that there is. I must say a word in favour of the Planning Appeals Commission. Those of us who take part in planning affairs know the good job that it is doing. But there are planners on the commission and there seems to be a


great effort to keep development away from the rural districts.
I want country schools to continue. I want to see the country community continue. I want to see people brought up in those areas able to build there and live there. I want them to be able to bring their children to those areas, because they know those areas and they have had happy childhoods there. They could have a happy adult life in those areas and their children could have a happy childhood as well.
I hope that the Minister will look not only at the matters raised tonight by various hon. Members from Northern Ireland but also at planning and in some way try to help us in respect of these matters.
It is essential not only that the people of Northern Ireland are well housed but that they realise that they have a part to play in their own housing. I should like to see tenants taking more of an interest in the well-being of their estates. The Minister's suggestions in his recent publication are very helpful, and I hope that all those in Northern Ireland, whether in publicly-owned houses or privately-owned houses, will do their best to give their houses a face-lift so that all Northern Ireland will benefit and the world will realise that there are people in Northern Ireland who believe in its future.

10.11 p.m.

Mr. John Dunlop: The presence of a digital clock in the Chamber has an inhibiting effect on would-be speakers. To me it approximates to the green eye of the little yellow god. I shall therefore be very brief.
I want to talk about the temporary housing of the victims of bomb damage. Recently, the little town of Castledawson, only 15 minutes' drive from my home, was savagely bombed and practically destroyed, and many people were left homeless. I pay tribute to the welfare people who did their best in the circumstances to rehouse those affected. But there are some anomalies and I want to draw attention to one of them.
A baker who lives in the village and does a good job supplying the whole area with fresh bread had his whole establish-

ment completely wrecked and his home destroyed. He was reduced to moving into a caravan in his badly wrecked yard. He has to attend during the night to ovens and so on which have to be kept at a certain temperature.
A good neighbour whose house was not too badly damaged offered the baker and his family the use of his house. The Housing Executive had already offered the baker a temporary house in the neighbouring town of Magherafelt, where, as a bombing victim, he was entitled to temporary housing. But that is five miles away. He could not afford to be that far from his business.
Therefore, the friend who had offered his house said that he would go to the Housing Executive house to facilitate Mr. Ditty. The local management of the Housing Executive said, "That is all right, Mr. Campbell. You give your house to Mr. Ditty. But we cannot guarantee to give you the house that we were going to give him." Mr. Campbell will have to take his place in the queue, and if he does not have sufficient points, he will not get the house because his is not an emergency housing problem. That is a monumental anomaly. Surely more flexibility should be allowed to the local management to determine such a case.
I wonder whether the Minister would remind the Secretary of State of his firm promise to visit that savagely bombed area. Some 250 lbs. of explosive was used—not home-made from fertilisers but gelignite—and it made an awful mess. The Secretary of State was not able to go to the village as he had promised. Perhaps the Minister would bring to his right hon. Friend's attention that promise which has not been kept.
I hope that the Minister will concede that it is an anomaly that a man who wants to live near his business is prevented from doing so by the monumental bureaucracy of the Housing Executive. I went to see the housing manager personally. He threw down the booklet with all the little coloured chequers and said that he could not in all conscience give Mr. Campbell the house that Mr. Ditty was offered. I said that I did not understand that and he replied, "Those are the rules. I cannot do it."
There should be a little flexibility. I know that some people and some hon. Members are afraid of any local control of housing. I am not asking for that. I am asking for local management to have

some autonomy, contingent perhaps upon the approval of headquarters in Belfast, so that it may act sensibly to help people who have suffered grievously from bombing. I commend this idea to the Minister.

10.15 p.m.

Mr. J. Enoch Powell: This is by any standards a substantial piece of legislation. Had it applied to any other part of the United Kingdom, it would have made a considerable hole in the Government's timetable for the relevant Session. However, that is not a point for the debate, except to recognise that within the procedures under the 1974 Act Ministers have made very large efforts to secure at any rate a shadow of the collaboration which we get in the passage of legislation in the ordinary sense.
There have been three months during which the order was in the form of proposals before hon. Members and before the public of Northern Ireland, and the previous Minister of State carried out a quite detailed consultation with my hon. Friend and myself. It is perhaps pertinent to inquire whether as a result of the consultations, and as a result of the prepublication in the form of proposals, there has been any difference at all between the proposed draft and the draft before us now. It would be interesting to know, because it would be surprising if legislation of this size got through the most benevolent Committee stage without the Government's recognising the necessity to make some improvements in it.
As we develop the procedures for considering these orders, which were suggested during the appropriation debate in the summer, I hope we shall find that we get quite substantial changes between the proposal stage and the draft stage where major points have been brought to the attention of the Government.
For the most part, the order brings about a far-reaching assimilation between the law in Northern Ireland and the law in Great Britain on the subject matter of housing grants and housing development. My hon. Friends and I would make no complaint of that. There are certain differences, which are fully justified; but in most respects this represents a drawing together of the procedures and law in Northern Ireland and in the rest of the United Kingdom.
The first of the four major matters which the order covers is an illustration of that; for the provisions which are

being made for housing associations move away from the style of housing associations hitherto in Northern Ireland and apply almost precisely the law and practice as it stands in Great Britain. The Government are taking, if not a leap in the dark, at any rate a major initiative in seeking to make housing associations one of their instruments in Northern Ireland.
In winding up, the Minister might respond to the invitations which have been issued to him in the debate to expand a little upon the precise function which the Government hope that housing associations are to fulfil. Will housing associations bring a greater flexibility than the Housing Executive can to the work of housing? Will they attract into housing capital from non-public sources which would otherwise not be available? Will they contribute additionally to the managerial skill and enterprise in the housing field? I think that it would be a service if the Under-Secretary would dilate somewhat upon this.
Housing associations are to be an instrument of housing policy in Northern Ireland. Therefore we consider it right—in this respect the hon. Member for Belfast, West (Mr. Fitt) has been at one with my hon. Friends and myself—that the Department of the Environment should have full and proper control over the character and quality of the housing associations which are used. The rules, which are available in the form of a draft order, "Criteria for Registration of a Housing Association", of which the Under-Secretary of State was good enough to send advance copies to some of us, are impressive in showing how far the Department will he able to exercise control and surveillance over housing associations. For example,
The association must be … so fitted and organised as to be an acceptable body for handling public finance. The calibre and quality of the persons exercising this control should be such that the affairs of the association are likely to be conducted in a responsible and effective manner.
These are matters of judgment, which will be exercised by the Department; but it is far better that the Department should impose strict standards—after all, hon. Members will have the right to intervene in any case where it appears that such


control is being unconscionably exercised—if housing associations are to play a bigger part in housing in Northern Ireland. They should be bodies fully competent for the purpose and fully respected by the public.
I hope that the Under-Secretary of State will respond to the question of which I gave him notice in an intervention in his opening speech and say more about the financial arrangements which are contemplated for the housing associations. Elsewhere in the order there are precise indications of the limits on the contribution which will be made by the Department towards housing operations. It is curious that the order is silent as to the criteria which will be applied in this respect. It is surely right that an indication of policy in that matter should be given by the Government before we part with the order.
One more provision dealing with housing associations, although it reproduces that already in force in Great Britain, should perhaps he referred to. That is the provision for deficit grants for hostels which appears in Article 30 of the order. As the article stands, theoretically it would be possible for housing grants from the Department of the Environment to housing associations to subsidise the conditions and the rent of persons in hostel accommodation. If that were so, an undesirable overlap would occur between the housing agency on the one side and the social service agencies on the other: for the support of the individual and his provision with what he needs if he is unable otherwise to obtain it is primarily a matter not for housing provision but for the welfare and social services. Perhaps, therefore, the Under-Secretary of State will be good enough to indicate the limits within which this remarkable provision for meeting the deficits incurred in the provision of hostel accommodation by housing associations will be exercised.
I turn to the second and third of the four main elements in the order. In doing so I observe that they are almost exclusively of relevance to Belfast. It is a reminder that Northern Ireland is not one place but two—namely Belfast and what is not Belfast. Many of the policies that have been devised to apply to the conditions of Belfast have little relevance

to the rest of the Province, and vice versa.
As the Minister is relatively new in the Northern Ireland Office, I make a suggestion to him. Living, as Northern Ireland Ministers do, in Belfast and looking out from Stormont Castle over a part of the city, it is especially difficult for them to have constantly present in their minds a general perspective of the Province as a whole. It is important for them to make every endeavour to remember that when they are looking at Belfast and concentrating, as they often will be, upon its problems, it is not the only part—in some respects not a typical part—of the whole Province of Northern Ireland for which they are responsible.
These two provisions which are primarily directed to Belfast relate to the housing action areas and the emergency provisions in Part VII of the order. I reiterate that the housing action areas should not become merely Housing Executive enclaves. The Department should endeavour to use as many agencies as possible in securing improvement in the housing action areas. If they can get the owner-occupiers, the private owners of rented accommodation and the housing associations to take a hand in the action areas, the result will be far better than if the matter is merely left, for simplicity or any other reason, to the Housing Executive. It will certainly need more effort—it always needs more effort—to produce variety rather than uniformity, but the effort will be worth while. I hope that that will be recognised by the hon. Gentleman when he replies.
I turn to the emergency provisions in Part VII. We have been given a handsome undertaking that despite our legislative limitations these provisions will not be extended without representatives from Northern Ireland having the opportunity to discuss the proposal and, if necessary, enter objection. I emphasise again that it would be a bleak prospect if we were to accept that Part VII will be one of those cases where nothing lasts but the provisional. The acquisition and occupation—I think that "possessing" is the technical word—of property under Part VII will in practice bring property and land permanently into the hands of the Housing Executive. In the present circumstances in Belfast, none of us can say


that that is not right and necessary. But we should jealously maintain the temporary and emergency nature of this power. As soon as possible, it should no longer be necessary and should not be permissible for the Executive to exercise the powers which it is given in Part VII.
Finally, I turn to the fourth of the major items. In some ways it is the most important of all the four elements of the order. Certainly it is the part which is most attractive—namely, the generous and extensive provision made for the repair and improvement of existing property other than the property of the Executive. I insert those last words because my hon. Friend the Member for Antrim, North (Rev. Ian Paisley) did the House a service by reminding it that to discuss repair, improvement and rehabilitation of housing in Northern Ireland and forget the condition of so much of the stock belonging to the Executive would be the height of unrealism.
One cannot but be oppressed by the burden of the inheritance which the Housing Executive took over from the predecessor housing authorities, especially perhaps in rural areas like mine. One comes almost unawares upon little groups of houses here and there across the countryside where the living conditions are as intolerable as any to be found in the slums of the great cities. Yet this property is vested in the Housing Executive. As one talks to the people living in these houses, they naturally want to have some intelligent prospect of what their future may be. So one finds oneself in constant communication with the Executive at all levels about the repair and improvement of this inheritance. Very often the Executive has to wait upon other branches of the Administration. Very often it is water and sewerage which are the dominant factors in these operations of the Housing Executive.
Often—though this does not arise directly out of the order, the question of housing improvement involves it—it is of the greatest help if the Housing Executive is able, either through hon. Members or by other means, to give its tenants some view of a period of years ahead and of the manner in which improvements are expected to take place over that period. As a matter of simple public relations for

the Housing Executive and the Department, it is really important to be able to tell the inhabitants of houses such as those I have described that this is a three-year job or that is a five-year job, that this can be done next year but that that will be a quite distant project.
We should never be afraid to obtain for our constituents and communicate to them that sort of projection of the future, whether or not it is agreeable in the particular case. I personally have received from all levels of the Housing Executive total co-operation in ascertaining projections and information about the prospects for this or that group of houses, this or that estate, in my constituency. I cannot but feel, however, that it would be helpful if at some stage these projections were pooled so that the tens of thousands of families—no, the hundreds of thousands—who occupy Housing Executive houses could see on a large scale that they too are to share in the process of repair, improvement and rehabilitation which Part VI of the order opens up for owner-occupiers and tenants of private property.
The provisions of Part VI are 50 per cent. better than the corresponding provisions in Great Britain, and all of us from Northern Ireland will say "So they should be". But it is worth emphasising how great is the incentive which is being given to owner-occupiers and, subject to certain conditions, to landlords to repair and improve their houses. The owner-occupier or the landlord will have to put up only one-quarter of the cost of doing the job at most, and in some areas only one-tenth. He gets the improvement; he gets his property, which is his responsibility, put back into repair, improved and rehabilitated for 25 per cent. or even only 10 per cent. of the cost of doing the job. That is a remarkably fine bargain. The fact that we are all prepared to justify it in existing circumstances is evidence of the stress that the House and the Government place on the maintenance of existing property.
One of the striking characteristics of Northern Ireland, and certainly of the part with which I am familiar, is the sheer volume of work which people do themselves on their houses. I do not believe there is any parallel in Great Britain to the readiness of people in Northern Ireland to turn to and carry out substantial


building works in the improvement of houses and the conversion of buildings. It is quite common to find an ordinary member of the public, perhaps newly married, setting out to convert an old school house with his own labour and a little assistance from others into a home for his family. It is that sort of initiative which ought to be getting an impulse from Part VI of the order, and we will be very disappointed if it does not receive it.
This point underlines what was said by my hon. Friend the Member for Antrim, North about the obsession of the planners in favour of housing development in large masses. Perhaps it is easier for someone who came to Northern Ireland from outside than for natives of Northern Ireland to see what a great asset the Province has in the pattern of distribution of its population. The structure of rural Northern Ireland, which at first sight appears to be a haphazard scatter of houses, but which, upon more intimate acquaintance, is seen to be the product of a long and characteristic history, will be a great asset for Northern Ireland in the coming years and one which ought not to be destroyed by the application of planning rules of thumb that might be very satisfactory on the outskirts of cities or in other parts of Great Britain. As the turnover takes place from agricultural occupation to industrial occupation, this distribution of population will be a source of great strength in enabling the people to turn from one type of life and employment to another without having to desert their rural background and without destroying the essential and characteristic heritage of Northern Ireland.
This will not happen unless the planning authorities in Northern Ireland are deliberately concerned not merely to maintain but to expand the existing nuclei right across the face of the country. Over and over again we come across cases where an additional house, a house for an employee—not a farm employee, for whom it is relatively easy, but an employee in one of the shops or small workshops in a tiny hamlet—is required, but where this is being resisted by the planning authorities on the ground that if the man wants a house he ought to move

to Downpatrick or some other major area of population.
One is not pleading the case for sporadic development when one says that planning ought to be engaged in Northern Ireland in the preservation, maintenance and revivification of the typical groups of houses and hamlets which are its characteristic. I hope that the effect of Part VI will be to strengthen that characteristic spread of the population.
Finally, coming from owner-occupied to landlord-owned houses, there is of course a factor in all this which has been only lightly mentioned this evening, and that is rents. It is no use supposing that all the provisions in Part VI will secure the maintenance of the existing stock of rented housing unless rents are adequate to give the landlord a reasonable reward for the responsibility which he undertakes, as well as to cover the economic cost of keeping the property, once it is repaired and rehabilitated, in decent condition. We need urgently to have a debate upon rents in Northern Ireland. It is already about two years overdue. The Under-Secretary, we suspect, is anxious to have such a debate. Certainly it is time that something was done about the structure of private rents in Northern Ireland. My hon. Friends and I and, I am sure, the hon. Member for Belfast, West can assure the Government that in tackling that task they will have the technical support, the parliamentary support, as well as the policy support of Northern Ireland Members.
A large number of questions have been put to the Under-Secretary in the debate. There are some which he must in all fairness answer in the course of his windup speech. As to the rest, I am sure that he will follow the admirable standard his colleagues have set in previous debates of mopping up behind and ensuring that all the points that have been raised receive, sooner or later—and the sooner the better—a reply from him in writing.

10.42 p.m.

Mr. Carter: This has been an extremely wide-ranging debate. We have gone from Wilson's Row in Ballyclare to Dixon Street—I was not sure where that was—and from West Belfast to Fermanagh. This would tend to highlight the extent of the housing problem in Northern Ireland.
Since I have been responsible for the Northern Ireland Department of the Environment, we have issued a wide range of policy documents and discussion documents, and now we have the order. It has, therefore, in a very short space of time, given me an excellent insight into the housing problems of Northern Ireland. I am not an expert on European housing matters, but I would not mind hazarding a guess that Northern Ireland's housing problem is probably as bad as that anywhere in Western Europe and is probably a lot worse than most. The debate so far tonight has confirmed that.
To say that there have been 50 years or more of neglect in Northern Ireland may be considered by some to be too pointed an observation. One cannot direct a criticism at any one group or organisation. I suppose that everyone in Northern Ireland, with the situation as it is, has made a contribution of some kind towards the problem. The problems are enormous. They are problems of disrepair, lack of amenities and, of course, the dreaded problem of sectarianism—and, thankfully, we do not experience that in the greater part at least of Great Britain. No one in the debate has sought to underestimate its effects on the housing problem. None of us for one moment must ever try to underestimate its overall effect. I hope that this order and all the discussion documents which have been issued with it will mark the beginning of the long fight back. We must not deceive ourselves. It will be a long fight back. We have a long way to go. We must be optimistic but at the same time realistic.
We want to adopt a diverse approach. There is no monolithic approach to Northern Ireland's housing problems. If one takes out Belfast, Northern Ireland is still essentially a rural community and because of its nature any solution to the problems demands that the approach be diverse.
I assure hon. Members on all sides of the House that while I am Minister responsible for housing I shall devote all my energies to the housing problem. Even though I have been in office for less than seven months, I can see that many of the problems, be they social, economic or political, are based on bad housing. If we could get to grips with the problem of bad housing we might

make a contribution to solving Northern Ireland's many other problems. Having said that, I do not underestimate the size of the problem. It is enormous, as the range of questions asked in the debate has indicated. I shall do my best to answer all of them. If I forget anything it will be dealt with later and the fullest possible reply will be sent to hon. Members.
The hon. Member for Abingdon (Mr. Neave) asked about housing association rents. As the right hon. Member for Down, South (Mr. Powell) said, this is to some extent a leap in the dark. We have Great Britain legislation in the background to which we can refer but for Northern Ireland it is an entirely new venture. We shall have to see how we go. We expect that the average grant will be about 80 per cent, but we stress that the grant will vary from scheme to scheme. With the range of housing and the range of people for which housing associations will cater, we cannot say what figure will be put on rents. We hope that housing associations will work in the housing action areas, for we want to see the most diverse approach to housing action areas.
We also want to see housing associations involved in the private sector. As hon. Members opposite know, much of the small terraced property in Belfast remains in private hands. We hope that with the availability of grants, much of the private property can be maintained and that we can get the most diverse approach possible.
The hon. Member for Abingdon also asked about the present take-up of improvement grants. It is not great. I will give him a detailed reply by letter but we hope, with the increased publicity that we shall be devoting to the whole subject of improvement, that there will be a much greater take-up. If there is not, the policy will fail. We shall do what we can to ensure that there is the maximum possible take-up. In that event the policy will be successful.
The hon. Gentleman pointed out that there are 25,000 properties in the private rented sector with rents under £1 and asked whether, in view of that, the private rented sector would be retained. It is our hope that a large part of it will be retained, but clearly there are great


difficulties. Of the 60,000 houses in the private rented sector, 25,000 are currently regarded as unfit for human habitation. These are clearly candidates for a public take-over. We have to be frank about that. We hope that we can leave the rest in the private sector.
The hon. Member also raised the question of compulsory powers. He asked whether the houses would remain in public hands. The answer is that they will. There is no doubt, if the Housing Executive takes over a property, that it will remain in the ownership of the Executive. The hon. Member for Antrim, South (Mr. Molyneaux) talked about the past difficulties of housing associations in Northern Ireland. To be honest, there has not been much of an effort in the past and no doubt there have been problems. We shall do what we can to ensure that housing associations play a major part in housing provision in Northern Ireland.
I was asked whether there would be encouragement to take up major schemes. If experience in Great Britain is anything to go by, housing associations will not be so involved. They tend to concentrate on smaller groups of housing. Once again, we shall have to see how we go. We never know. Housing associations in Northern Ireland, given the support of the Department, may well prove to be a greater success than in Great Britain as a whole.
The hon. Member for Antrim, South dealt with rent rebates and said that there was not sufficient take-up in many areas. I am told by the Minister of State that, with the assistance of hon. Members and of councillors, there has been an increase in the take-up. We value the assistance that has been given to us. The Department will do all it can, along with the Executive, to increase the justified take-up of rent rebates.
Housing for older people was another issue that concerned the hon. Member, as it does us. We hope that housing associations will play an important part in the provision of such accommodation. To a certain extent this has been a neglected area in Northern Ireland. With the wide range of instruments available to us—housing associations, the

Executive and the private rented sector—we shall do all we can to assist here.
The hon. Member for Antrim, South was rather concerned about the standard of new housing, as is the Department. Given the fact that we have an enormous job before us in the provision of new housing, we must ensure that what we do build will last. We do not want to be constantly repairing and maintaining. We want to put up a house, leave it and get on with the job of providing more homes or renovating existing properties. The hon. Member raised a case concerning Wilson Road in Ballyclare. I will have the Department look at this and reply later to the hon. Member.
We are all concerned about the demolition of existing stock. But, to be fair, one must point out that the general demolition of existing housing has been the subject of some controversy in the United Kingdom as a whole. There is no doubt that we have gone much too far in destroying existing houses. Who is to blame, I do not know; the politicians have played their part. For 25 years we saw the solution to the problems of the inner cities in the removal of the older houses and the export of the people in them to new towns.
I live on the edge of a new town and have done so since I married 17 years ago. I know that in moving from an inner city area to a new town I escaped some problems, but I ran into others. Tragically, however, we have been able to learn only by experience. We have enough experience now. We have enough time before us in Northern Ireland, and we certainly have a big enough problem there. Where we can save existing houses, and in so doing save existing communities, we shall do all we can to achieve that end.
But it is not always easy. Sometimes the saving of old houses is much more expensive than the provision of new ones. I hope that we can all work together in this. The Department and the Housing Executive do not want to impose on any individual or community something that they plainly do not want. If people do not want to live on the 20th floor of a block of flats, we do not want to put them there.
One of the saving graces of the housing scene in Northern Ireland is that, with the exception of Belfast, we have the land available. That cannot be said of my own city of Birmingham. The right hon. Member for Down, South probably knows rather more about this than I do, having been a Member for an almost adjacent constituency. He knows that urban constituencies are circumscribed by boundaries from which they simply cannot escape.
The hon. Member for Antrim, South spoke also of new towns. He raised the question of Poleglass, which is the subject of an inquiry, so I shall not go further into that matter tonight. He also raised the question of Twinbrook. No doubt, if we had had long enough tonight, other hon. Members could have raised problems relating to new towns such as Craigavon. We know that there are problems and we shall not run away from them. We shall try to deal with them in the best and most rational and, above all, the most humane way possible. I know that everyone in Northern Ireland who is concerned with the housing problem is prepared to work in that spirit.
The hon. Gentleman also referred to scrutiny of the Housing Executive's expenditure. This is a new body. Obviously it will have to learn from experience. But if hon. Members opposite have cases which they feel are a criticism of the Executive, I know that the Executive will be only too glad to look at them, and the Department wants to look carefully at any problem put to it. We are all keen to ensure that we get value for money in housing because we have such a massive problem in Northern Ireland.
My hon. Friend the Member for Belfast, West (Mr. Fitt) asked how many housing associations there were. There are between 30 and 40 housing associations. If he wants a more detailed answer, I will send it to him.
My hon. Friend was concerned about the bona fides of both present and future housing associations. I am sure that he heard what I said about the powers that we have and intend to use to ensure that housing associations are run in a legitimate way by legitimate people. I have been at the Northern Ireland Office for only seven months. My hon. Friend has

spent a lifetime in Northern Ireland and therefore knows the background of both past and present difficulties regarding voluntary associations. We are aware of these problems. We do not think that, because of the difficulties, we should jib at moving into an area which can make a considerable contribution towards relieving the housing problem. We have taken on board what he and other hon. Members have said.
My hon. Friend also referred to the difficulty that he and others have in dealing with housing bodies, tenants' associations, and so on. We are aware of this problem. We cannot hide the fact that these bodies exist. We keep a constant watch on this matter. Again, if hon. Members have information which will make our job easier, we would welcome it.
The hon. Member for Belfast, North (Mr. Carson) stressed the need to make housing grants available to young married couples. We are concerned to ensure that housing action areas, particularly in Belfast, principally because of the smallness of the accommodation, do not become enclaves for old-age pensioners. We shall try to produce balanced communities. If young married couples are prepared to go into housing action areas and to take up accommodation which has only two bedrooms, that will be welcomed. We shall do all that we can to structure, if that is the right term, the community in the proper sense. We do not want to leave retired people behind in areas which have been renovated.
We are aware of the abuse of grants, but have power to oversee grants and we shall do all in our power to ensure that grants are properly claimed and used. Again, if hon. Members can provide us with information which indicates that things are going wrong, we shall welcome it.
The hon. Member for Belfast, North asked what system would be used to determine rents in the private sector. A document under my name was recently issued by the Northern Ireland Office making certain proposals. We await responses and ideas. The idea that we put forward was that there should be a multiplier acting on the net annual valuation. It is only an idea. If we receive a better suggestion from local authorities, hon. Members or any other


groups concerned with housing, we shall be only too pleased to look at it. At the end of the day we want to produce a viable rent which will maintain units of accommodation in a proper standard of repair.
The Belfast community—I stress Belfast—must have a vested interest in maintaining property at a reasonable standard in areas in which it likes to live. In this sense there is no such thing as cheap housing. In fact, cheap housing in Northern Ireland has brought us to the stage at which we are now. If we had had economic rents in the private sector during the past 50 years, most of the houses which have been demolished would still be there. There is not much private rented accommodation left in Northern Ireland. We believe that a viable renting system is the best guarantee of its survival.
The hon. Member spoke about control of the housing associations. I can only repeat to him what I said to the hon. Member for Belfast, West.

Mr. Carson: Would the Minister not agree that although his Department had control over the Housing Executive in the past, millions of pounds of public money have been wasted on grants and contracts for rehabilitation which are now the subject of police inquiries? Could this not happen again even if his Department keeps a sharp eye on the housing associations?

Mr. Carter: The police are investigating certain matters and I do not wish to comment on them. We intend to act in the most vigorous way to ensure that abuses do not occur in future. I cannot stress that enough.
The hon. Member also raised the question of protecting vandalised houses. If we wish houses to remain in existence, we must take action to safeguard them, and in many cases this is costly. However, I do not believe that many people would agree with the hon. Member that demolition is the answer. Most people look forward to vandalised houses being used again. Knocking them down and rebuilding them would be infinitely more expensive than the current temporary steps which we are taking. In any case, the demolition for which the hon. Gentle-

man is asking would not have been possible before we introduced this order.
The hon. Member for Antrim, North (Rev. Ian Paisley) complained about the lack of time, but this order has been chewed over for two years and housing has been before the Northern Ireland Committee. Given the round of discussions which have taken place, I do not think that anyone can complain about lack of time. The way in which we deal with certain Northern Ireland legislation may not be satisfactory, but on this occasion we have had a good deal of discussion and everyone has had ample time to comment on the proposals.
The hon. Member for Antrim, North asked how we would define housing action areas. This will be done in consultation with the Housing Executive, local authorities, hon. Members opposite and other parties concerned with housing. We want to get the greatest possible amount of agreement, though it is true that, particularly in Belfast, there will be little disagreement about what constitutes a housing action area.
Perhaps the hon. Member was wondering whether the principle would also apply in rural areas. The answer is "Yes". If he can point to a rural town which would benefit from this action, there is no reason why, with agreement, we should not move ahead there in the same way as we would in Belfast.
The hon. Member also dealt with a number of problems associated with the Northern Ireland Housing Executive. No one can deny that there have been problems. The Executive faces enormous difficulties. There were housing problems long before it was established. That is why we are here tonight. It would be difficult for any body to operate in a blameless and efficient way in this field. The Housing Executive has done a great job so far. With this order and other proposals that we have made, we hope that the situation will be improved.
Up to the limit to which I have referred, farm houses can benefit. The hon. Gentleman should not be under the impression that farm houses of any kind in rural areas are outside the scope of the improvements.
The hon. Gentleman raised the question of TRADA houses. I have a long


brief on the subject, but I shall not bore the House by reading it tonight. However, I shall give the general outline and write to the hon. Gentleman. When I heard the radio broadcast on Friday, I was rather worried and concerned, given the scope of the housing problem in Northern Ireland, but having looked at the matter I am satisfied that the Housing Executive has operated in the correct fashion here.
The original order was for 100 houses, but on an experimental basis. We could have bought those 100 houses here in Great Britain, but we decided, because of the unemployment problem in Northern Ireland, that we would get those 100 houses constructed in Ulster. We have to wait to see precisely how those 100 houses stand up to the test of time. In the meantime, however, we cannot produce any more.
When one sets the current concern alongside the factual background against which the order was placed, the apparent contradiction of having an enormous housing problem yet shutting down a part of a firm constructing houses can be understood.

Mr. Carson: How long does the Housing Executive allow for these TRADA houses to be tested? Surely the Minister must be aware that these houses have stood over a winter, and in fact a full year. How long will it be before he will be able to say that these houses have stood up to the test?

Mr. Carter: I would not have thought that a year was long enough. I should have thought that it would be about five years. Many people have moved into flats and have been quite happy for two or three years but have discovered after five years that they were not so pleasant. It is not only a matter of structural problems. There is also the question whether people are happy. I have been in one of these houses. The first impression is that people like them, but we shall have to wait longer than a year. If we can cut down the time, well and good. We are seeking an optimum solution. We are not trying to impose anything on anyone.
The hon. Member for Antrim, North then asked how many houses had been completed in each of the last three years.

In 1973 the figure was 5,966, in 1974 it was 5,412, and in 1975 it was 4,885. In 1976 we hope that the figure will be about 6,000, so this year should be the best of the last four. That is how things stand at present.
The hon. Member went on to deal with the question of rural planning, about which I have heard a lot in the last few days. No doubt some of what I have said over the past few days has found its way back to the hon. Member. It was no more than three or four weeks ago that I first looked at the question in the Department. I knew that I would be meeting the Association of Local Authorities on a couple of occasions, on one of them specifically about rural planning, and that I ought to come to grips with the problem as soon as I possibly could because it is an issue of great concern in Northern Ireland.
I have some sympathy with the way in which people react to current planning matters in rural areas. I cannot be too specific tonight, but with the issue of planning notes within days rather than weeks, and guidelines on wider planning matters in the rural areas, I hope that for at least a year we can operate a slightly more flexible system. I have given the Association of Local Authorities an undertaking that it can come back on the matter—it will come back in a year's time—and that we shall look at the way in which the rural planning system has operated. If it is satisfactory we shall continue with it. If it is not, we shall look at it again to see whether we can refine it. All that we want to do is to ensure that the rural environment is protected. No one is keener in that respect, I would have thought, than those who live in the rural environment, but it must be said that those who live in towns may also have something to say about it. The countryside belongs to us all, not simply to those who live in it.
My initial feeling is that we ought to concentrate rather more on the small nuclear communities in the rural areas where services exist. That is only a general approach of mine at the moment. I cannot guarantee what outcome will flow from what I shall now say. Where small nuclear communities exist, such as hamlets and villages, I cannot for the life of me see any reason—given that the services are available—why we cannot


extend those communities in a planned and orderly way. [HON. MEMBERS: "Hear, hear."] I do not think that would conflict with wider planning, housing and population questions in Northern Ireland.
Even though some hon. Members opposite said "Hear, hear", I have no doubt that, probably in a few months, when the system is in operation, they will see certain objections to it. I do not think we shall find a perfect system for the administration of rural planning either in Northern Ireland or anywhere else in the United Kingdom.

Rev. Ian Paisley: We deeply appreciate what the Minister has said and we look forward to the implementation of some of these things. Would the hon. Gentleman say a word about these proposed plans which have no statutory power but which have been tightening their grip on certain areas such as the perimeters of Ballymena, Ballymoney and other towns?

Mr. Carter: The policy is currently under review. I do not think that I can go much further than what I have said tonight. If hon. Members opposite have ideas on this matter I would like to hear from them. I certainly hope to work in the closest possible way with the local authorities in this area. In fact, I have positively asked them to go away and look at their local authority areas and try, among themselves, to come to some agreement about where they think development will be most appropriate.
I would not suggest for a moment that we shall necessarily accept what they say to us, but hopefully we can have a productive dialogue. There is no reason at all why we should be at loggerheads.
I have already dealt with the question of housing on farms. Houses on farms will qualify for grants in precisely the same way as other housing will, up to the ceiling to which I referred before.
The hon. Member for Mid-Ulster (Mr. Dunlop) raised a wider question, although he raised it in the context of a particular case—the problems of victims who suffer from bombing or being burned out. If the hon. Gentleman will leave that with me—I have not encountered the difficulty before—I will get my officials to look into it and send him a reply. If the hon.

Gentleman is not satisfied in respect of the particular matter he raised, we shall look closely at it. Anyone would be concerned at the plight of people who have been forcibly thrown out of their home and, as a consequence, have housing problems.
The right hon. Member for Down, South raised two points in an interjection when I spoke at the outset. I would give him a detailed reply on the first point on housing associations. It is that housing association grants will be based on an overall appraisal of the scheme. The capital costs, on-going management costs, income from rents and the level of grants vary from scheme to scheme. This is the basic system which exists in Great Britain. We expect that the average grant will be about 80 per cent. but I would stress that the grant will vary from scheme to scheme. The revenue deficit grant and hostel grant will be based on an analysis of the revenue grants of the association. If that does not go far enough for the right hon. Gentleman I shall certainly send him a more detailed reply later.
On the question of the renewal of the powers in the order, to which the right hon. Gentleman referred, I give the undertaking once again that discussions will take place before any attempt is made to renew them after five years.
The right hon. Gentleman asked whether there was a difference between the draft published and the order as it now exists. As a result of the consultation process, a number of amendments, major and minor, were made. For example, the repairs grant was extended to cover all rent-restricted houses and Article 66 was extended to ensure that essential repairs were carried out to unoccupied houses to prevent damage to adjoining property. No doubt I could give more detailed examples, but that serves to illustrate what I said to the hon. Member for Antrim, North, that extensive consultations are taking place.
As to what the functions of housing associations will be, as the right hon. Gentleman said to some extent this is a leap in the dark. Their rôle will be as big as the potential for housing associations in Northern Ireland. They will be complementary initially to the activities of the public sector, but one never


knows. Perhaps legitimate housing associations, properly run and organised, could have a bigger role to perform in Northern Ireland than elsewhere. We shall have to wait and see.
The right hon. Gentleman welcomed the control of housing associations. I can only emphasise again that the Department and I recognise the difficulties in this area. One would be foolish ever to try to ignore them. We are well aware of them and we shall do all we can to ensure that housing associations remain proper organisations in the sense of the legal definition and that they are run by the right people.
I have referred to hostel deficit finance. The right hon. Gentleman then referred to the difference between Belfast and the rural areas. I am well aware of this. Since I have been in Northern Ireland I have travelled over most of the Province. I have been to all the major communities, such as Derry, Newry, Down, Fermanagh, Enniskillen, Armagh and of course throughout Belfast. I have even been to Ballymena, but I think that I have been to most places in the Province.

Rev. Ian Paisley: Not Rathlin Island.

Mr. Carter: I have looked at it from Corrymeela. I hope one day to go there and meet the king himself. That is a pleasure yet to come, but I suppose there are many pleasures to come in Northern Ireland. I am certainly aware of the difference between Belfast, a major conurbation, and the rural areas. I hope that what I have said about rural planning will show that I am aware of the difference.
The right hon. Member said that housing action areas should not be Housing Executive enclaves. Once again, I have dealt with that. We sincerely hope that we can encourage a multiplicity of provision in a housing action area. We want to ensure that communities in Belfast—we are looking at Belfast specifically here—have a viability and social cohesion which can only come from diversity.
The right hon. Gentleman was worried about the emergency provisions. He has

cause to be worried, but they are allied to the existing situation. We hope that as soon as normality returns to life in Northern Ireland the need for these provisions will disappear. In any event, I have already given assurances on how the Government will go about seeking any renewal.
Although there have been several references tonight to the improvement of property owned by the Housing Executive, it is the first I have heard of the difficulty. I shall see what can be done to ensure that, particularly in rural areas, Housing Executive property is quickly brought up to standard. I can think of some difficulties, but we must tackle them with a sense of optimism and hope and not leave them because someone suspects that they are incapable of solution. I do not believe that they are.
I have given the Department's view on how we might proceed over private sector rents. If hon. Members have ideas on the subject we shall be pleased to hear them. Our view is that the net annual valuation times a multiplier yet to be determined is perhaps the best way to go about the matter. However, we shall welcome views on that and on all the other housing proposals now before the people of Northern Ireland.
I believe that with two documents published in the past few days, on tenant participation and new forms of home ownership and on the private rented sector, together with the order, we can make a major attack upon, and hopefully find a permanent solution to, the problems of housing in Northern Ireland. It is a desperate problem, but one which the Government are determined to overcome. I believe that, with the co-operation of the Housing Executive, emerging housing associations, the local authorities and hon. Members, we can overcome the difficulties, no matter how big some people might think them to be.

Question put and agreed to.

Resolved,
That the Housing (Northern Ireland) Order 1976, a draft of which was laid before this House on 5th August, be approved.

Orders of the Day — SCHOOL UNIFORM (GRANTS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]

11.28 p.m.

Mr. Andrew F. Bennett: I am pleased to have this opportunity to raise the question of school uniform grants, though I have two reservations. First, I am not a believer in school uniform. I find it odd that secondary schools try to encourage pupils to show self-expression in the use of English, in drama and in art, that they encourage pupils to make decisions and exercise choice, and yet deny them self-expression when it comes to what they should wear in school. However, I accept that many schools demand uniform and that it will be a long time before we can change that.
My second reservation is that ideally the Government should be trying to abolish school uniform grants. One of the major aims of trying to introduce a generous child benefit was to remove the need for fragmented means-tested grants such as this. If the Government had been able to introduce for next Easter a generous child benefit scheme I should not be raising the subject now. Sadly, the Government have not been able to introduce the generous level of child benefit that I wanted to see. Therefore, it is important that the Government review the many fragmented forms of benefit and consider whether they can he improved.
What is the position of grant towards school clothing? What is the position of the Department of Education and Science? The Department states:
It is to be hoped that in any review of school clothing arrangements, authorities will bear in mind the position of poorer parents and ensure that grants towards the cost of distinctive clothing such as school uniform are adequate as Section 81 of the Education Act, 1944 puts it, 'for the purpose of enabling pupils to take advantage without hardship to themselves or their parents of any educational facilities available to them.'
That is what the Act states and what the Department says in interpretation of it, but what happens in practice is often very different. It seems that on the whole the schools rather than the education authorities decide what uniform they

want. They often do that with no regard to how much grant is available in their local area. If they take that factor into account, very often they provide two lists to the parents of children entering the schools, one containing what is called essential school uniform and the other what is described as desirable school uniform. However, in a variety of ways they put pressure on the parents to conform not only to the essential list but to the desirable list.
When we talk to 12-year old girls or boys entering secondary school we find that they are concerned not to be different from other pupils. They tend to go to the full excesses of any list that is supplied by the school rather than limiting themselves to the essential items. Many schools are asking parents to spend about £50 a year on school uniform and clothing that they consider essential. It cannot be said that the whole of the £50 is being spent as a result of the school uniform as it is obvious that the children have to go to school in clothes. However, there is much evidence that school pressure probably doubles the cost to the parent. Instead of having a cost of possibly £25 to clothe a child adequately for a year so that he or she can attend school, the demand for the school uniform means that the cost is doubled.
I am aware that there is great variation from school to school. Some schools still have elaborate uniforms. They go in for blazers with fancy beading down the sides and a woven badge on the pocket. Other schools go in for much simpler uniform, merely saying that they would like pupils to wear clothes of the same colour—for example, either blue or grey.
Just as the demands from schools vary, so does the response of many local authorities. There is great variation in the means tests that local authorities apply. There are also great variations in the amount of grant and the frequency of grant that local authorities make. From all the information that I can gather, it is clear that over the past two or three years grants have slipped behind the steadily inflating cost of school uniforms. They have slipped even further behind the demands that schools are increasingly making.
I have been supplied with a great deal of information by the Child Poverty Action Group. In a recent survey it found that authorities such as Liverpool were making a grant of about £10 every two years and that some schools in the area were demanding uniforms costing £50. In the borough of Barnet in the London area the grant varied between £12 for the 11-plus pupil, to about £20 for a pupil of 15. The borough's estimate of the cost of essential school uniform was £25. That covered only one item of each piece of equipment. It is not easy to wash a shirt every night, or every couple of nights, so that the pupil can wear it again the following morning. If we are realistic, the assessment was very much out of keeping with the size of the problem. My own area of Stockport is fairly good about the amount that it will make available. It bases the grant on the school meal means test. It provides for essential items such as a blazer or its equivalent and, if the schools still insist on them, it covers such items as a tie or a cap.
However, there is a clause in the scheme which says that need has to be proven and the authority interprets that by saying that the child must not have any of those items. I have recently come across a problem with parents who have bought those items using money saved perhaps for an electricity bill. The parents have asked the authority for a grant but have been told that a grant could not be made because the items had already been purchased. That seems to be a major anomaly.
Let me list the problems that school uniforms create for low income families, particularly when the parents are determined that their child shall not suffer or be different from other children. Uniform usually means that a child has to have two different types of clothing, one for school and one for the weekends, and that greatly increases clothing costs.
The uniforms are often of poor quality and that often means that the parents are involved in extra expense. I admit that the school cannot win in that respect, for if the clothes are of good quality, that puts up the initial purchase price and if they are of poor quality, there are extra recurring costs.
Another problem is that the expense comes for the low income family in one fell swoop. Some schools estimate about £50 for a whole year's uniform, but parents often have to spend £40 at one go when the child moves into secondary school. Finding £40 at the end of the school holidays in late August or early September is a tremendous burden for low income families.
There is a problem about sports equipment, especially in view of all the other demands that a school may place on a pupil—cookery and craft requirements, for instance. Many parents are being asked an average of £2 a week to send their children to school in what is supposed to be our free system of education.
Another problem for parents is that getting help is not at all easy. The application forms for means tests are extremely complicated and it is often difficult for parents to get hold of them. Stockport, which I represent, defends the complexity of the application form by saying that the education welfare office is expected to help most people to fill in the form. However, parents find it confusing, particularly if they are receiving supplementary benefit they have to decide whether to apply to the supplementary benefit office or the education office for extra help. They are often pushed between the two. I understand that if it is distinctive clothing, school uniform, they should go to the education office and if it is essential clothing, they should go to the Department of Health and Social Security. Parents are often shuttlecocked between the two authorities, getting nothing but confusion.
A great deal of confusion exists because of variations in demands by the schools and the amounts of grant that authorities give, so that people who live relatively close to each other and who have children going to the same school get different grants because they live in different areas.
A growing problem is the way in which the wearing of uniforms is being extended into many junior schools. It particularly alarms me that junior schools are now beginning to adopt uniforms and there is no provision in the local authority scheme for provide a grant in such cases. A low income family may provide a child with


a uniform for the junior school with great difficulty only to find that the child moves into the secondary school for which another uniform is expected although the first has not been worn out. I understand from the Child Poverty Action Group that it is a problem not only with secondary schools but with middle and upper schools.
I understand that this is a particular problem in Northumberland where the schools want to indicate separate identities so they have completely different uniforms between the middle and upper schools. This increases the problem of having to pay out the cost without getting good value for it.
Another acute problem is that many local authorities do not actually make cash grants. They give parents a voucher to take to a certain shop and exchange for a particular item. That is all right if the shop has the item in stock, but it presents problems if it has not. If a blazer or a pair of shoes is not in stock the parent cannot go to an alternative supplier because the voucher is usable only at the one shop.
Some schools put a lot of pressure on children to wear uniforms, certainly threatening not to allow them into school, if not actually carrying it out. Some schools do not allow children to take part in sports or games unless that they have the proper sports equipment. It is appalling to see children sitting out watching these activities because they have not got the equipment.
Then there are the difficulties faced by parents who apply for grants at the end of the summer. The education officers take time to process the applications and the clothing is not there for the start of the new term. Then there is the problem of disasters—a blazer gets torn, an essential item is lost. None of the schemes makes provision for help in these cases.
In these difficult circumstances the education welfare officers try very hard, and many schools patch up the situation with charitable activities such as the collection of second-hand clothing, and so on. But it is time the Government did something to improve the situation, particularly in view of the difficulties and disappointments over child benefit.
Of course we cannot expect a lot of money in the present economic situation. However the Department of Education and Science should send out a circular to local authorities recommending one uniform means test—preferably from the school meals test—thus cutting down on the number of forms. The Department should also try to make the grant as generous as possible, and having done that, see that the demands placed on parents by schools for uniforms conform to the amount of the grant available in that local authority. That is the minimum one can expect of the Government.
Also, local authorities should be discouraged from using vouchers which tie parents to a particular shop, and they should clear up for once and for all the anomalies of being shuttled backwards and forwards between the local council Education department, and the Department of Health and Social Security. Junior schools should be discouraged from inflicting the cost of uniforms on parents, and the problem of transfers from middle to upper schools should be sorted out.
We should look at the situation where many schools spend £10 to £15 a year per pupil on books and other equipment, yet at the same time demand that parents pay out that amount for a single blazer. There is still a situation in which too many schools measure achievement by the number of pupils who wear school uniform, rather than by the amount they learn, or the way in which their personalities flower.

11.44 p.m.

The Under-Secretary of State for Education and Science (Miss Margaret Jackson): I am grateful to my hon. Friend the Member for Stockport, North (Mr. Bennett) for raising this matter. It is one in which I am extremely interested and about which I am very much concerned, although I fear that I shall not be able to be as helpful as both he and I would wish.
The power of local education authorities to help with the cost of school uniforms comes from Section 81(a) of the 1944 Act which, together with the relevant regulations, enables them to pay money to cover such expenses as may be necessary to enable children to take part in school activities. This arrangement has certain advantages. The help


given can be completely confidential, outside the school milieu. The majority of authorities take trouble to inform parents of the financial support that is available.
The system is discretionary; therefore it is inherent in the system that some authorities will be more generous than others and that different assistance will be given by different authorities. We are keeping a constant watch on the situation and I assure my hon. Friend that we take a careful note of all the information that we receive. I am grateful for the additional information that he has provided. As the law stands, the Government have no power to intervene in these matters.
Any change to provide a more satisfactory system would require new legislation. There are mixed views about the desirability of school uniforms. The decisions to introduce uniforms and what kind of uniforms are matters for individual schools subject to the advice of the local education authority. But it is within the power of individual schools to decide what uniform they will have, without regard to the grant available. I take the point that this kind of pressure from a school might have bad effects on the cost of uniforms.

Mr. Dennis Canavan: Will my hon. Friend take this opportunity of publicly castigating those individual schools and individual teachers who exclude children from a particular educational activity just because in their opinion they are not suitably clothed. Will she also publicly castigate those teachers who give corporal punishment to children in such circumstances? This is a terrible indictment of the educational system.

Miss Jackson: I had intended to deal with this point later in my speech. There is no question that we in the Department—and, I believe, most, if not all, local authorities—deplore to the utmost any such action by staff or schools. Subject to the reservation that it is sometimes the case that disputes which appear to be about school uniform in fact have nothing to do with it, I endorse my hon. Friend's remarks where action of this kind is taken.
We feel very strongly that decisions about school uniform—the kind of uniform, the cost and whether there is a uniform at all—should be taken on a democratic basis and should command a wide consensus among staff, pupils and parents. We fully endorse the advice, given to members by teachers' organisations, that it is sensible to consult parents and pupils about the uniform, and that the rules should be simple, not too restrictive and not likely to lead to excessive confrontations between pupil and teacher, as was described by my hon. Friend the Member for West Stirlingshire (Mr. Canavan).
My hon. Friend the Member for Stockport, North referred to areas where the grant was inadequate in view of the cost. It is our experience that, where the grant is patently inadequate, a great deal has been achieved by local pressure. There has been a number of instances in which arrangements which were felt to be unsatisfactory have been reviewed by the authority after a campaign by groups in the area. We think that is probably the best way to approach the question at the moment.
A few cases have come to our notice where unreasonable disciplinary action has been taken against pupils whose parents could not afford to buy the uniform and in circumstances where pupils have been humiliated. Such conduct is quite inexcusable. It is sometimes the case that the uniform is just a manifestation of the trouble and is not the real root of the trouble. Where this is not the case, it is my understanding that all local education authorities take the same view as we take and as my hon. Friend takes in the matter, and would certainly initiate prompt and appropriate action if cases of this kind were brought to their notice.
My hon. Friend asked me to recommend to local authorities the circumstances in which they should make a grant and to suggest that they should iron out some of the more obvious differences between what happens under one authority and another. I will look most carefully at his suggestions. As he knows, this is not the most propitious time even for suggesting to local authorities that they should iron out differences between


the provision in one area and another, still less when this would mean increasing expenditure.
However, I am interested and very sympathetic to the problems which arise in this area, and I assure my hon. Friend

that, like him, I take a close interest in it and will do anything I can to help in the matter.

Question put and agreed to.

Adjourned accordingly at nine minutes to Twelve o'clock.